☐ |
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☑
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Title of Each Class
|
Trading Symbol(s)
|
Name of Each Exchange on Which Registered
|
||
American Depositary Shares
*
|
|
SNE
|
|
New York Stock Exchange
|
Common Stock
**
|
|
|
|
|
* |
American Depositary Shares evidenced by American Depositary Receipts.
Each American Depositary Share represents one share of Common Stock.
|
**
|
No par value per share. Not for trading, but only in connection with the listing of American Depositary Shares pursuant to the requirements of the New York Stock Exchange.
|
|
Outstanding as of
|
|||||||
|
March 31, 2020
|
|
March 31, 2020
|
|
||||
Title of Class
|
(Tokyo Time)
|
|
(New York Time)
|
|
||||
Common Stock
|
|
|
1,220,159,940
|
|
|
|
|
|
American Depositary Shares
|
|
114,612,168
|
☑
Large accelerated filer
|
☐
Accelerated filer
|
☐
Non-accelerated
filer
|
☐
Emerging growth company
|
US GAAP
☑
|
International Financial Reporting Standards as issued by the International Accounting Standards Board
☐
|
Other
☐
|
Item 17
☐
|
|
Item 18
☐
|
Yes
☐
|
|
No
☑
|
(i) | Sony’s ability to maintain product quality and customer satisfaction with its products and services; |
(ii) | Sony’s ability to continue to design and develop and win acceptance of, as well as achieve sufficient cost reductions for, its products and services, including image sensors, game and network platforms, smartphones and televisions, which are offered in highly competitive markets characterized by severe price competition and continual new product and service introductions, rapid development in technology and subjective and changing customer preferences; |
(iii) | Sony’s ability to implement successful hardware, software, and content integration strategies, and to develop and implement successful sales and distribution strategies in light of new technologies and distribution platforms; |
(iv) | the effectiveness of Sony’s strategies and their execution, including but not limited to the success of Sony’s acquisitions, joint ventures, investments, capital expenditures, restructurings and other strategic initiatives; |
(v) | changes in laws, regulations and government policies in the markets in which Sony and its third-party suppliers, service providers and business partners operate, including those related to taxation, as well as growing consumer focus on corporate social responsibility; |
(vi) | Sony’s continued ability to identify the products, services and market trends with significant growth potential, to devote sufficient resources to research and development, to prioritize investments and capital expenditures correctly and to recoup its investments and capital expenditures, including those required for technology development and product capacity; |
(vii) | Sony’s reliance on external business partners, including for the procurement of parts, components, software and network services for its products or services, the manufacturing, marketing and distribution of its products, and its other business operations; |
(viii) | the global economic and political environment in which Sony operates and the economic and political conditions in Sony’s markets, particularly levels of consumer spending; |
(ix) | Sony’s ability to meet operational and liquidity needs as a result of significant volatility and disruption in the global financial markets or a ratings downgrade; |
(x) | Sony’s ability to forecast demands, manage timely procurement and control inventories; |
(xi) | foreign exchange rates, particularly between the yen and the U.S. dollar, the euro and other currencies in which Sony makes significant sales and incurs production costs, or in which Sony’s assets, liabilities and operating results are denominated; |
(xii) | Sony’s ability to recruit, retain and maintain productive relations with highly skilled personnel; |
(xiii) | Sony’s ability to prevent unauthorized use or theft of intellectual property rights, to obtain or renew licenses relating to intellectual property rights and to defend itself against claims that its products or services infringe the intellectual property rights owned by others; |
(xiv) | the impact of changes in interest rates and unfavorable conditions or developments (including market fluctuations or volatility) in the Japanese equity markets on the revenue and operating income of the Financial Services segment; |
(xv) | shifts in customer demand for financial services such as life insurance and Sony’s ability to conduct successful asset liability management in the Financial Services segment; |
(xvi) | risks related to catastrophic disasters, pandemic disease or similar events; |
(xvii) | the ability of Sony, its third-party service providers or business partners to anticipate and manage cybersecurity risk, including the risk of unauthorized access to Sony’s business information and the personally identifiable information of its employees and customers, potential business disruptions or financial losses; and |
(xviii) | the outcome of pending and/or future legal and/or regulatory proceedings. |
6
|
||||
6
|
||||
6
|
||||
6
|
||||
6
|
||||
6
|
||||
7
|
||||
18
|
||||
18
|
||||
20
|
||||
29
|
||||
30
|
||||
31
|
||||
31
|
||||
31
|
||||
50
|
||||
51
|
||||
52
|
||||
57
|
||||
58
|
||||
59
|
||||
65
|
||||
65
|
||||
66
|
||||
66
|
||||
71
|
||||
76
|
||||
85
|
||||
86
|
||||
86
|
||||
86
|
||||
87
|
||||
87
|
||||
87
|
||||
87
|
||||
87
|
||||
88
|
||||
88
|
||||
88
|
||||
88
|
||||
89
|
||||
89
|
||||
89
|
||||
89
|
||||
89
|
||||
89
|
||||
89
|
||||
89
|
||||
97
|
||||
97
|
||||
101
|
||||
104
|
||||
104
|
||||
104
|
||||
104
|
||||
104
|
||||
106
|
||||
106
|
106
|
||||
106
|
||||
106
|
||||
108
|
||||
108
|
||||
108
|
||||
109
|
||||
109
|
||||
109
|
||||
110
|
||||
110
|
||||
110
|
||||
111
|
||||
111
|
||||
112
|
||||
113
|
||||
118
|
||||
118
|
||||
118
|
||||
119
|
||||
120
|
Item 1.
|
Identity of Directors, Senior Management and Advisers
|
Item 2.
|
Offer Statistics and Expected Timetable
|
Item 3.
|
Key Information
|
A.
|
Selected Financial Data
|
|
Fiscal year ended March 31
|
|||||||||||||||||||
|
2016
|
2017
|
2018
|
2019
|
2020
|
|
||||||||||||||
|
(Yen in millions, yen per share amounts)
|
|||||||||||||||||||
Income statement data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Sales and operating revenue
|
8,105,712
|
7,603,250
|
8,543,982
|
8,665,687
|
|
8,259,885
|
|
|||||||||||||
Equity in net income (loss) of affiliated companies
|
2,238
|
3,563
|
8,569
|
(2,999
|
) |
|
9,637
|
|
||||||||||||
Operating income
|
294,197
|
288,702
|
734,860
|
894,235
|
|
845,459
|
|
|||||||||||||
Income before income taxes
|
304,504
|
251,619
|
699,049
|
1,011,648
|
|
799,450
|
|
|||||||||||||
Income taxes
|
94,789
|
124,058
|
151,770
|
45,098
|
|
177,190
|
|
|||||||||||||
Net income attributable to Sony Corporation’s stockholders
|
147,791
|
73,289
|
490,794
|
916,271
|
|
582,191
|
|
|||||||||||||
Comprehensive income (loss)
|
(44,915
|
) |
143,652
|
553,220
|
995,542
|
|
666,032
|
|
||||||||||||
Data per share of Common Stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income attributable to Sony Corporation’s stockholders*
|
|
|
|
|
|
|
|
|||||||||||||
— Basic
|
119.40
|
58.07
|
388.32
|
723.41
|
|
471.64
|
|
|||||||||||||
— Diluted
|
117.49
|
56.89
|
379.75
|
707.74
|
|
461.23
|
|
|||||||||||||
Cash dividends declared Interim
|
10.00
|
10.00
|
12.50
|
15.00
|
|
20.00
|
|
|||||||||||||
|
(8.09 cents
|
) |
(8.79 cents
|
) |
(11.11 cents
|
) |
(13.18 cents
|
) |
|
(18.38 cents
|
)
|
|||||||||
Cash dividends declared Fiscal
year-end
|
10.00
|
10.00
|
15.00
|
20.00
|
|
25.00
|
|
|||||||||||||
|
(9.01 cents
|
) |
(9.13 cents
|
) |
(13.75 cents
|
) |
(18.28 cents
|
) |
|
(22.76 cents
|
)
|
|||||||||
Balance sheet data:
|
|
|
|
|
|
|
|
|||||||||||||
Sony Corporation’s stockholders’ equity
|
2,463,340
|
2,497,246
|
2,967,366
|
3,746,377
|
|
4,125,306
|
|
|||||||||||||
Common stock
|
858,867
|
860,645
|
865,678
|
874,291
|
|
880,214
|
|
|||||||||||||
Net assets
|
3,124,410
|
3,135,422
|
3,647,157
|
4,436,690
|
|
4,789,535
|
|
|||||||||||||
Total assets**
|
16,673,390
|
17,660,556
|
19,065,538
|
20,981,586
|
|
23,039,343
|
|
|||||||||||||
Number of shares issued at fiscal
year-end
(thousands of shares of common stock)
|
1,262,494
|
1,263,764
|
1,266,552
|
1,271,230
|
|
1,261,059
|
|
|||||||||||||
Sony Corporation’s stockholders’ equity per share of common stock
|
1,952.79
|
1,977.72
|
2,344.96
|
2,995.31
|
|
3,380.96
|
|
B.
|
Capitalization and Indebtedness
|
C.
|
Reasons for the Offer and Use of Proceeds
|
D.
|
Risk Factors
|
Item 4.
|
Information on the Company
|
A.
|
History and Development of the Company
|
B.
|
Business Overview
|
• | greater financial resources and financial strength ratings; |
• | greater brand awareness; |
• |
more extensive marketing and sales networks, including through
tie-ups
with other types of financial institutions;
|
• | more competitive pricing; |
• | larger customer bases; and |
• | a wider range of products and services. |
• | Sony’s representative office in Tehran, Iran, which was established in 1992, has been closed and has been under liquidation processes since before the beginning of the fiscal year ended March 31, 2014. In |
the course of liquidation, Sony engages in certain incidental transactions (for example, permits, taxes, and similar matters incidental to the wind-down of the office in Iran) with Iranian government-owned entities. No material revenues or profits are associated with these transactions with the Iranian government-owned entities. |
C.
|
Organizational Structure
|
Name of company
|
Country of
incorporation/residence |
|
(As of March 31, 2020)
Percentage owned |
|
||||
Sony Global Manufacturing & Operations Corporation
|
Japan
|
100.0
|
||||||
Sony Semiconductor Solutions Corporation
|
Japan
|
100.0
|
||||||
Sony Semiconductor Manufacturing Corporation
|
Japan
|
100.0
|
||||||
Sony Marketing Inc.
|
Japan
|
100.0
|
||||||
Sony Mobile Communications Inc.
|
Japan
|
100.0
|
||||||
Sony Network Communications Inc.
|
Japan
|
100.0
|
||||||
Sony Interactive Entertainment Inc.
|
Japan
|
100.0
|
||||||
Sony Home Entertainment & Sound Products Inc.
|
Japan
|
100.0
|
||||||
Sony Storage Media Solutions Corporation
|
Japan
|
100.0
|
||||||
Sony Imaging Products & Solutions Inc.
|
Japan
|
100.0
|
||||||
Sony Music Entertainment (Japan) Inc.
|
Japan
|
100.0
|
||||||
Sony Financial Holdings Inc.*
|
Japan
|
65.1
|
||||||
Sony Life Insurance Co., Ltd.*
|
Japan
|
100.0
|
||||||
Sony Bank Inc.*
|
Japan
|
100.0
|
||||||
Sony Assurance Inc.*
|
Japan
|
100.0
|
||||||
Sony Americas Holding Inc.
|
U.S.A.
|
100.0
|
||||||
Sony Corporation of America
|
U.S.A.
|
100.0
|
||||||
Sony Electronics Inc.
|
U.S.A.
|
100.0
|
||||||
Sony Music Holdings Inc.
|
U.S.A.
|
100.0
|
||||||
Sony Interactive Entertainment LLC
|
U.S.A.
|
100.0
|
||||||
Sony Pictures Entertainment Inc.
|
U.S.A.
|
100.0
|
||||||
CPT Holdings, Inc.
|
U.S.A.
|
100.0
|
||||||
Sony Music Entertainment
|
U.S.A.
|
100.0
|
||||||
Sony/ATV Music Publishing LLC
|
U.S.A.
|
100.0
|
||||||
Sony Europe B.V.
|
U.K.
|
100.0
|
||||||
Sony Interactive Entertainment Europe Ltd.
|
U.K.
|
100.0
|
||||||
Sony Global Treasury Services Plc
|
U.K.
|
100.0
|
||||||
Sony Overseas Holding B.V.
|
Netherlands
|
100.0
|
||||||
Sony (China) Limited
|
China
|
100.0
|
||||||
Sony EMCS (Malaysia) Sdn. Bhd.
|
Malaysia
|
100.0
|
||||||
Sony Electronics (Singapore) Pte. Ltd.
|
Singapore
|
100.0
|
D.
|
Property, Plant and Equipment
|
Location
|
Approximate
floor space |
|
Principal products produced
|
|||
|
(square feet)
|
|
|
|||
In Japan:
|
|
|
|
|
||
Nagasaki
(Sony Semiconductor Manufacturing Corporation
— Nagasaki TEC)
|
2,381,000
|
CMOS Image Sensors
|
||||
Kumamoto
(Sony Semiconductor Manufacturing Corporation
— Kumamoto TEC)
|
2,289,000
|
CMOS & CCD Image Sensors, Microdisplay
|
||||
Kagoshima
(Sony Semiconductor Manufacturing Corporation
— Kagoshima TEC)
|
1,789,000
|
Analog LSI, Crystal LED (Panel Process), MMIC
|
||||
Oita
(Sony Semiconductor Manufacturing Corporation
— Oita TEC)
|
976,000
|
CMOS Image Sensors (Wafer Process)
|
||||
Kohda, Aichi
(Sony Global Manufacturing & Operations Corporation
— Tokai TEC — Kohda Site)
|
903,000
|
Digital Still Cameras, Video Camera Peripherals, Interchangeable-lens Cameras, Lenses for Interchangeable-lens Cameras, Lenses, Lens Blocks, Audio Devices, aibo
|
||||
Inazawa, Aichi
(Sony Global Manufacturing & Operations Corporation
— Tokai TEC — Inazawa Site)
|
842,000
|
Surface Mounted Boards, TVs, Crystal LED (Assembly)
|
||||
Tsuruoka, Yamagata
(Sony Semiconductor Manufacturing Corporation
— Yamagata TEC)
|
698,000
|
CMOS Image Sensors (Wafer Process)
|
||||
Kosai, Shizuoka
(Sony Global Manufacturing & Operations Corporation
— Tokai TEC — Kosai Site)
|
576,000
|
Broadcasting/Professional Equipment (Cameras/Editing Systems), Projectors,
Professional-use
Microphones,
Professional-use
Monitors, Medical Peripheral Equipment, Flow Cytometers
|
||||
Kisarazu, Chiba
(Sony Global Manufacturing & Operations Corporation
— Kisarazu TEC)
|
541,000
|
PlayStation
®
4, FeliCa IC Cards and Related Devices
|
||||
Outside of Japan:
|
|
|
|
|
||
Terre Haute, Indiana, U.S.A.
(Sony DADC US Inc.)
|
1,352,000
|
Blu-ray
Disc
™
-ROMs
|
||||
Bangi, Malaysia
(Sony EMCS (Malaysia) Sdn. Bhd. — KL TEC)
|
1,183,000
|
TVs, TV Components
|
||||
Penang, Malaysia
(Sony EMCS (Malaysia) Sdn. Bhd. — PG TEC)
|
1,021,000
|
System Stereos, Home Audios, BD Players, BD Recorders, Digital Music Players, Headphones, Personal Audios
|
||||
Huizhou, China
(Sony Precision Devices (Huizhou) Co., Ltd.)
|
1,010,000
|
Optical Pickups
|
Location
|
Approximate
floor space |
|
Principal products produced
|
|||
|
(square feet)
|
|
|
|||
Wuxi, China
(Sony Digital Products (Wuxi) Co., Ltd.)
|
798,000
|
Digital Still Cameras, Lens Assembly, Interchangeable-lens Cameras, Lenses for Interchangeable-lens Cameras
|
||||
Bangkadi, Thailand
(Sony Device Technology (Thailand) Co., Ltd.)
|
513,000
|
Image Sensor Assembly
|
Item 4A.
|
Unresolved Staff Comments
|
Item 5.
|
Operating and Financial Review and Prospects
|
A.
|
Operating Results
|
|
Fiscal year ended March 31
|
|||||||
|
2019
|
2020
|
|
|||||
|
(Yen in billions)
|
|||||||
Sales and operating revenue
|
8,665.7
|
|
8,259.9
|
|
||||
Equity in net income (loss) of affiliated companies
|
(3.0
|
) |
|
9.6
|
|
|||
Operating income
|
894.2
|
|
845.5
|
|
||||
Income before income taxes
|
1,011.6
|
|
799.5
|
|
||||
Net income attributable to Sony Corporation’s stockholders
|
916.3
|
|
582.2
|
|
• | Remeasurement and realized gains resulting from the public listing and sale of a portion of shares of SRE Holdings Corporation: 17.3 billion yen (All Other) |
• | Realized and remeasurement gains resulting from the transfer of a portion of shares of NSF Engagement Corporation: 6.3 billion yen (Corporate and elimination) |
• | Remeasurement gain resulting from Sony’s acquisition of the remaining approximately 60% equity interest in DH Publishing, L.P. (“EMI”), which owned and managed EMI Music Publishing: 116.9 billion yen (Music segment) |
• | An impairment charge against long-lived assets of the smartphone business: 19.2 billion yen (EP&S segment) |
• | An impairment charge against long-lived assets and goodwill of the storage media business: 12.9 billion yen (All Other) |
|
Fiscal year ended March 31
|
|||||||
|
2019
|
2020
|
|
|||||
|
(Yen in millions)
|
|||||||
Sales to external customers by product category
|
|
|||||||
Digital Software and Add-on Content
|
1,102,231
|
|
1,010,296
|
|
||||
Network Services
|
326,524
|
|
337,265
|
|
||||
Hardware & Others
|
795,867
|
|
572,199
|
|
||||
Sales to external customers
|
2,224,622
|
|
1,919,760
|
|
||||
Intersegment sales
|
86,250
|
|
57,791
|
|
||||
G&NS segment total sales
|
2,310,872
|
|
1,977,551
|
|
||||
G&NS segment operating income
|
311,092
|
|
238,400
|
|
||||
|
(Units in millions)
|
|||||||
Major product unit sales
|
|
|||||||
PS4 hardware
|
17.8
|
|
13.6
|
|
||||
|
Fiscal year ended March 31
|
|||||||
|
2019
|
2020
|
|
|||||
|
(Yen in millions)
|
|||||||
Sales to external customers by product category
|
|
|||||||
Recorded Music — Streaming
|
227,513
|
|
276,039
|
|
||||
Recorded Music — Others
|
199,413
|
|
191,114
|
|
||||
Music Publishing
|
106,666
|
|
157,478
|
|
||||
Visual Media & Platform
|
261,433
|
|
213,961
|
|
||||
Sales to external customers
|
795,025
|
|
838,592
|
|
||||
Intersegment sales
|
12,464
|
|
11,317
|
|
||||
Music segment total sales
|
807,489
|
|
849,909
|
|
||||
Music segment operating income
|
232,487
|
|
142,345
|
|
||||
|
Fiscal year ended March 31
|
|||||||
|
2019
|
2020
|
|
|||||
|
(Yen in millions)
|
|||||||
Sales to external customers by product category
|
|
|||||||
Motion Pictures
|
436,017
|
|
475,061
|
|
||||
Television Productions
|
288,816
|
|
301,224
|
|
||||
Media Networks
|
260,437
|
|
234,429
|
|
||||
Sales to external customers
|
985,270
|
|
1,010,714
|
|
||||
Intersegment sales
|
1,603
|
|
1,140
|
|
||||
Pictures segment total sales
|
986,873
|
|
1,011,854
|
|
||||
Pictures segment operating income
|
54,599
|
|
68,157
|
|
||||
|
Fiscal year ended March 31
|
|||||||
|
2019
|
2020
|
|
|||||
|
(Yen in millions)
|
|||||||
Sales to external customers by product category
|
|
|||||||
TVs
|
788,423
|
|
646,513
|
|
||||
Audio & Video
|
362,580
|
|
346,060
|
|
||||
Still and Video Cameras
|
421,506
|
|
384,142
|
|
||||
Mobile Communications
|
487,330
|
|
362,144
|
|
||||
Other
|
243,328
|
|
231,021
|
|
||||
Sales to external customers
|
2,303,167
|
|
1,969,880
|
|
||||
Intersegment sales
|
17,461
|
|
21,388
|
|
||||
EP&S segment total sales
|
2,320,628
|
|
1,991,268
|
|
||||
EP&S segment operating income
|
76,508
|
|
87,276
|
|
||||
|
(Units in millions)
|
|||||||
Major product unit sales
|
|
|||||||
TVs
|
11.3
|
|
9.3
|
|
||||
Digital cameras within
Still and Video Cameras*
|
3.6
|
|
2.9
|
|
||||
Smartphones within
Mobile Communications
|
6.5
|
|
3.2
|
|
||||
|
Fiscal year ended March 31
|
|||||||
|
2019
|
2020
|
|
|||||
|
(Yen in millions)
|
|||||||
Sales to external customers
|
770,622
|
|
985,259
|
|
||||
Intersegment sales
|
108,708
|
|
85,317
|
|
||||
I&SS segment total sales
|
879,330
|
|
1,070,576
|
|||||
I&SS segment operating income
|
143,874
|
|
235,584
|
|
||||
|
Fiscal year ended March 31
|
|||||||
|
2019
|
2020
|
|
|||||
|
(Yen in billions)
|
|||||||
G&NS
|
75.1
|
|
56.3
|
|
||||
EP&S
|
221.3
|
|
206.5
|
|
||||
I&SS
|
253.4
|
|
250.5
|
|
||||
Total
|
549.8
|
|
513.3
|
|||||
|
Fiscal year ended March 31
|
|||||||
|
2019
|
2020
|
|
|||||
Japan
|
16.6
|
% |
|
16.6
|
%
|
|||
United States
|
23.8
|
% |
|
26.7
|
%
|
|||
Europe
|
26.6
|
% |
|
24.7
|
%
|
|||
China
|
13.0
|
% |
|
12.3
|
%
|
|||
Asia-Pacific (other than Japan and China)
|
13.3
|
% |
|
13.0
|
%
|
|||
Other
|
6.7
|
% |
|
6.8
|
%
|
|||
Total
|
100
|
% |
|
100
|
%
|
|||
|
Fiscal year ended March 31
|
|||||||
|
2019
|
2020
|
|
|||||
In-house
production
|
64
|
% |
|
73
|
%
|
|||
Outsourced production
|
36
|
% |
|
27
|
%
|
|||
Total
|
100
|
% |
|
100
|
%
|
|||
|
Fiscal year ended March 31
|
|||||||
|
2019
|
2020
|
|
|||||
|
(Yen in millions)
|
|||||||
Financial services revenue
|
1,282,539
|
|
1,307,748
|
|
||||
Financial Services segment operating income
|
161,477
|
|
129,597
|
|
|
Fiscal year ended March 31
|
|||||||
Financial Services segment
|
2019
|
2020
|
|
|||||
|
(Yen in millions)
|
|||||||
Financial services revenue
|
1,282,539
|
|
1,307,748
|
|
||||
Financial services expenses
|
1,120,276
|
|
1,179,776
|
|
||||
Other operating (income) expenses, net
|
104
|
|
(1,729
|
)
|
||||
|
|
|
|
|||||
|
1,120,380
|
|
1,178,047
|
|
||||
Equity in net loss of affiliated companies
|
(682
|
) |
|
(104
|
)
|
|||
|
|
|
|
|||||
Operating income
|
161,477
|
|
129,597
|
|
||||
Other income (expenses), net
|
(73
|
) |
|
(20
|
)
|
|||
|
|
|
|
|||||
Income before income taxes
|
161,404
|
|
129,577
|
|
||||
Income taxes
|
44,763
|
|
36,311
|
|
||||
|
|
|
|
|||||
Net income
|
116,641
|
|
93,266
|
|
||||
Less — Net income attributable to noncontrolling interests
|
235
|
|
483
|
|
||||
|
|
|
|
|||||
Net income of Financial Services
|
116,406
|
|
92,783
|
|
||||
|
|
|
|
|||||
|
Fiscal year ended March 31
|
|||||||
Sony without Financial Services segment
|
2019
|
2020
|
|
|||||
|
(Yen in millions)
|
|||||||
Net sales and operating revenue
|
7,396,401
|
|
6,965,971
|
|
||||
Costs of sales
|
5,160,284
|
|
4,764,014
|
|
||||
Selling, general and administrative
|
1,572,714
|
|
1,497,764
|
|
||||
Other operating (income) expense, net
|
(71,672
|
) |
|
(3,841
|
)
|
|||
|
|
|
|
|||||
|
6,661,326
|
|
6,257,937
|
|
||||
Equity in net income (loss) of affiliated companies
|
(2,317
|
) |
|
9,741
|
|
|||
|
|
|
|
|||||
Operating income
|
732,758
|
|
717,775
|
|
||||
Other income (expenses), net
|
133,929
|
|
(28,299
|
)
|
||||
|
|
|
|
|||||
Income before income taxes
|
866,687
|
|
689,476
|
|
||||
Income taxes
|
335
|
|
141,552
|
|
||||
|
|
|
|
|||||
Net income
|
866,352
|
|
547,924
|
|
||||
Less — Net income attributable to noncontrolling interests
|
8,778
|
|
7,092
|
|
||||
|
|
|
|
|||||
Net income of Sony without Financial Services
|
857,574
|
|
540,832
|
|
||||
|
|
|
|
|||||
|
Fiscal year ended March 31
|
|||||||
Consolidated
|
2019
|
2020
|
|
|||||
|
(Yen in millions)
|
|||||||
Financial services revenue
|
1,274,708
|
|
1,299,847
|
|
||||
Net sales and operating revenue
|
7,390,979
|
|
6,960,038
|
|
||||
|
|
|
|
|||||
|
8,665,687
|
|
8,259,885
|
|
||||
Costs of sales
|
5,150,750
|
|
4,753,174
|
|
||||
Selling, general and administrative
|
1,576,825
|
|
1,502,625
|
|
||||
Financial services expenses
|
1,112,446
|
|
1,171,875
|
|
||||
Other operating (income) expenses, net
|
(71,568
|
) |
|
(3,611
|
)
|
|||
|
|
|
|
|||||
|
7,768,453
|
|
7,424,063
|
|
||||
Equity in net income (loss) of affiliated companies
|
(2,999
|
) |
|
9,637
|
|
|||
|
|
|
|
|||||
Operating income
|
894,235
|
|
845,459
|
|
||||
Other income (expenses), net
|
117,413
|
|
(46,009
|
)
|
||||
|
|
|
|
|||||
Income before income taxes
|
1,011,648
|
|
799,450
|
|
||||
Income taxes
|
45,098
|
|
177,190
|
|
||||
|
|
|
|
|||||
Net income
|
966,550
|
|
622,260
|
|
||||
Less — Net income attributable to noncontrolling interests
|
50,279
|
|
40,069
|
|
||||
|
|
|
|
|||||
Net income attributable to Sony Corporation’s Stockholders
|
916,271
|
|
582,191
|
|
||||
|
|
|
|
|
Fiscal year ended March 31
|
|||||||
|
2019
|
2020
|
|
|||||
|
(Yen in millions)
|
|||||||
Restructuring charges
|
33,091
|
|
24,966
|
|
|
|
Fiscal year ended March 31
|
Impact of changes in
foreign exchange rates |
|
||||||||||
|
|
2019
|
2020
|
|
2019 to 2020
|
|
||||||||
|
|
(Yen in billions)
|
||||||||||||
G&NS
|
Sales
|
2,310.9
|
|
1,977.6
|
|
|
(65.4)
|
|
||||||
|
Operating income
|
311.1
|
|
238.4
|
|
|
(12.2)
|
|
||||||
EP&S
|
Sales
|
2,320.6
|
|
1,991.3
|
|
|
(59.8)
|
|
||||||
|
Operating income
|
76.5
|
|
87.3
|
|
|
(23.0)
|
|
||||||
I&SS
|
Sales
|
879.3
|
|
1,070.6
|
|
|
(22.2)
|
|
||||||
|
Operating income
|
143.9
|
|
235.6
|
|
|
(18.2)
|
|
|
Financial Services
|
Sony without
Financial Services |
Consolidated
|
|||||||||||||||||||||
|
March 31
2019 |
March 31
2020 |
|
March 31
2019 |
March 31
2020 |
|
March 31
2019 |
March 31
2020 |
|
|||||||||||||||
|
(Yen in millions)
|
|||||||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
|
||||||||||||||||||
Cash and cash equivalents (*1)
|
509,595
|
|
550,039
|
|
960,478
|
|
962,318
|
|
1,470,073
|
|
1,512,357
|
|
||||||||||||
Marketable securities (*2)
|
1,324,538
|
|
1,847,772
|
|
—
|
|
—
|
|
1,324,538
|
|
1,847,772
|
|
||||||||||||
Notes and accounts receivable, trade and contract assets
|
16,479
|
|
10,532
|
|
1,055,669
|
|
999,976
|
|
1,065,802
|
|
1,002,920
|
|
||||||||||||
Inventories
|
—
|
|
—
|
|
653,278
|
|
589,969
|
|
653,278
|
|
589,969
|
|
||||||||||||
Other receivables
|
63,921
|
|
73,117
|
|
159,758
|
|
115,100
|
|
223,620
|
|
188,106
|
|
||||||||||||
Prepaid expenses and other current assets
|
133,214
|
|
181,247
|
|
376,778
|
|
413,496
|
|
509,301
|
|
594,021
|
|
||||||||||||
Total current assets
|
2,047,747
|
|
2,662,707
|
|
3,205,961
|
|
3,080,859
|
|
5,246,612
|
|
5,735,145
|
|
||||||||||||
Film costs
|
—
|
|
—
|
|
409,005
|
|
427,336
|
|
409,005
|
|
427,336
|
|
||||||||||||
Investments and advances (*3)
|
11,400,938
|
|
12,457,977
|
|
399,696
|
|
351,936
|
|
11,724,651
|
|
12,734,132
|
|
||||||||||||
Investments in Financial Services, at cost
|
—
|
|
—
|
|
153,968
|
|
153,968
|
|
—
|
|
—
|
|
||||||||||||
Property, plant and equipment
|
22,920
|
|
18,247
|
|
752,847
|
|
890,640
|
|
777,053
|
|
908,644
|
|
||||||||||||
Other assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Right-of-use
assets
|
—
|
|
58,897
|
|
—
|
|
333,753
|
|
—
|
|
392,610
|
|
||||||||||||
Intangibles, net (*3)
|
42,968
|
|
49,871
|
|
874,998
|
|
856,439
|
|
917,966
|
|
906,310
|
|
||||||||||||
Goodwill (*3)
|
7,225
|
|
10,834
|
|
761,327
|
|
773,054
|
|
768,552
|
|
783,888
|
|
||||||||||||
Deferred insurance acquisition costs
|
595,265
|
|
600,901
|
|
—
|
|
—
|
|
595,265
|
|
600,901
|
|
||||||||||||
Deferred income taxes
|
3,533
|
|
10,365
|
|
198,953
|
|
200,021
|
|
202,486
|
|
210,372
|
|
||||||||||||
Other
|
32,085
|
|
38,949
|
|
311,653
|
|
305,028
|
|
339,996
|
|
340,005
|
|
||||||||||||
Total other assets
|
681,076
|
|
769,817
|
|
2,146,931
|
|
2,468,295
|
|
2,824,265
|
|
3,234,086
|
|
||||||||||||
Total assets
|
14,152,681
|
|
15,908,748
|
|
7,068,408
|
|
7,373,034
|
|
20,981,586
|
|
23,039,343
|
|
||||||||||||
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Short-term borrowings (*4)
|
564,609
|
|
758,737
|
|
226,470
|
|
81,246
|
|
791,079
|
|
839,983
|
|
||||||||||||
Short-term operating lease liabilities
|
—
|
|
9,363
|
|
—
|
|
59,595
|
|
—
|
|
68,942
|
|
||||||||||||
Notes and accounts payable, trade
|
—
|
|
—
|
|
492,124
|
|
380,810
|
|
492,124
|
|
380,810
|
|
||||||||||||
Accounts payable, other and accrued expenses
|
40,228
|
|
40,457
|
|
1,653,895
|
|
1,591,072
|
|
1,693,048
|
|
1,630,197
|
|
||||||||||||
Accrued income and other taxes
|
19,655
|
|
22,825
|
|
115,571
|
|
123,171
|
|
135,226
|
|
145,996
|
|
||||||||||||
Deposits from customers in the banking business
|
2,302,314
|
|
2,440,783
|
|
—
|
|
—
|
|
2,302,314
|
|
2,440,783
|
|
||||||||||||
Other
|
197,123
|
|
226,455
|
|
474,926
|
|
514,368
|
|
666,024
|
|
733,732
|
|
||||||||||||
Total current liabilities
|
3,123,929
|
|
3,498,620
|
|
2,962,986
|
|
2,750,262
|
|
6,079,815
|
|
6,240,443
|
|
||||||||||||
Long-term debt
|
235,761
|
|
240,143
|
|
336,349
|
|
398,793
|
|
568,372
|
|
634,966
|
|
||||||||||||
Long-term operating lease liabilities
|
—
|
|
41,192
|
|
—
|
|
273,668
|
|
—
|
|
314,836
|
|
||||||||||||
Accrued pension and severance costs
|
33,979
|
|
34,211
|
|
350,253
|
|
290,444
|
|
384,232
|
|
324,655
|
|
||||||||||||
Deferred income taxes
|
355,356
|
|
391,883
|
|
176,065
|
|
173,022
|
|
531,421
|
|
549,538
|
|
||||||||||||
Future insurance policy benefits and other (*5)
|
5,642,671
|
|
6,246,047
|
|
—
|
|
—
|
|
5,642,671
|
|
6,246,047
|
|
||||||||||||
Policyholders’ account in the insurance business
|
3,048,202
|
|
3,642,271
|
|
—
|
|
—
|
|
3,048,202
|
|
3,642,271
|
|
||||||||||||
Other
|
15,488
|
|
21,843
|
|
288,164
|
|
289,574
|
|
281,382
|
|
289,285
|
|
||||||||||||
Total liabilities
|
12,455,386
|
|
14,116,210
|
|
4,113,817
|
|
4,175,763
|
|
16,536,095
|
|
18,242,041
|
|
||||||||||||
Redeemable noncontrolling interest
|
—
|
|
—
|
|
8,801
|
|
7,767
|
|
8,801
|
|
7,767
|
|
||||||||||||
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Stockholders’ equity of Financial Services
|
1,695,563
|
|
1,790,333
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||||||
Stockholders’ equity of Sony without Financial Services
|
—
|
|
—
|
|
2,850,380
|
|
3,159,071
|
|
—
|
|
—
|
|
||||||||||||
Sony Corporation’s stockholders’ equity
|
—
|
|
—
|
|
—
|
|
—
|
|
3,746,377
|
|
4,125,306
|
|
||||||||||||
Noncontrolling interests
|
1,732
|
|
2,205
|
|
95,410
|
|
30,433
|
|
690,313
|
|
664,229
|
|
||||||||||||
Total Equity
|
1,697,295
|
|
1,792,538
|
|
2,945,790
|
|
3,189,504
|
|
4,436,690
|
|
4,789,535
|
|
||||||||||||
Total liabilities and equity
|
14,152,681
|
|
15,908,748
|
|
7,068,408
|
|
7,373,034
|
|
20,981,586
|
|
23,039,343
|
|
||||||||||||
|
March 31, 2020
|
|||||||||||||||
|
Cost
|
Gross
unrealized
gains |
Gross
unrealized
losses |
Fair
value |
||||||||||||
|
(Yen in millions)
|
|||||||||||||||
Financial Services Business:
|
|
|
|
|
||||||||||||
Available-for-sale
securities
|
|
|
|
|
||||||||||||
Sony Life
|
1,815,487
|
309,294
|
(484
|
) |
2,124,297
|
|||||||||||
Sony Bank
|
702,462
|
3,601
|
(2,065
|
) |
703,998
|
|||||||||||
Other
|
83,833
|
137
|
(822
|
) |
83,148
|
|||||||||||
Held-to-maturity
securities
|
|
|
|
|
||||||||||||
Sony Life
|
7,334,780
|
2,439,769
|
(6,078
|
) |
9,768,471
|
|||||||||||
Sony Bank
|
5,418
|
—
|
(421
|
) |
4,997
|
|||||||||||
Other
|
78,314
|
22,927
|
(73
|
) |
101,168
|
|||||||||||
Total Financial Services
|
10,020,294
|
2,775,728
|
(9,943
|
) |
12,786,079
|
|||||||||||
Non-Financial
Services:
|
|
|
|
|
||||||||||||
Available-for-sale
securities
|
1,370
|
—
|
—
|
1,370
|
||||||||||||
Held-to-maturity
securities
|
—
|
—
|
—
|
—
|
||||||||||||
Total
Non-Financial
Services
|
1,370
|
—
|
—
|
1,370
|
||||||||||||
Consolidated
|
10,021,664
|
2,775,728
|
(9,943
|
) |
12,787,449
|
• Within 1 year:
|
—
|
|||
• 1 to 5 years:
|
—
|
|||
• 5 to 10 years:
|
—
|
|||
• above 10 years:
|
100.0
|
% |
• Within 1 year:
|
22.4
|
% | ||
• 1 to 5 years:
|
59.1
|
% | ||
• 5 to 10 years:
|
1.0
|
% | ||
• above 10 years:
|
17.5
|
% |
|
Fiscal year ended March 31
|
|||||||||||||||||||||||
|
Financial Services
|
Sony without
Financial Services |
Consolidated
|
|||||||||||||||||||||
|
2019
|
2020
|
|
2019
|
2020
|
|
2019
|
2020
|
|
|||||||||||||||
|
(Yen in millions)
|
|||||||||||||||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net income (loss)
|
116,641
|
|
93,266
|
|
866,352
|
|
547,924
|
|
966,550
|
|
622,260
|
|
||||||||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Depreciation and amortization, including amortization of deferred insurance acquisition costs and contract costs
|
91,179
|
|
106,667
|
|
282,847
|
|
309,975
|
|
374,026
|
|
416,642
|
|
||||||||||||
Amortization of film costs
|
—
|
|
—
|
|
348,493
|
|
329,809
|
|
348,493
|
|
329,809
|
|
||||||||||||
Other operating (income) expense, net
|
104
|
|
(1,729
|
)
|
(71,672
|
) |
|
(3,841
|
)
|
(71,568
|
) |
|
(3,611
|
)
|
||||||||||
(Gain) loss on marketable securities and securities investments, net
|
(66,383
|
) |
|
93,088
|
|
(118,630
|
) |
|
20,177
|
|
(185,013
|
) |
|
113,265
|
|
|||||||||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(Increase) decrease in notes, accounts receivable, trade and contract assets
|
(867
|
) |
|
5,947
|
|
2,056
|
|
55,466
|
|
1,144
|
|
62,654
|
|
|||||||||||
(Increase) decrease in inventories
|
—
|
|
—
|
|
30,455
|
|
40,315
|
|
30,455
|
|
40,315
|
|
||||||||||||
(Increase) decrease in film costs
|
—
|
|
—
|
|
(410,994
|
) |
|
(361,194
|
)
|
(410,994
|
) |
|
(361,194
|
)
|
||||||||||
Increase (decrease) in notes and accounts payable, trade
|
—
|
|
—
|
|
18,534
|
|
(91,435
|
)
|
18,534
|
|
(91,435
|
)
|
||||||||||||
Increase (decrease) in future insurance policy benefits and other
|
544,179
|
|
520,683
|
|
—
|
|
—
|
|
544,179
|
|
520,683
|
|
||||||||||||
(Increase) decrease in deferred insurance acquisition costs
|
(88,807
|
) |
|
(99,433
|
)
|
—
|
|
—
|
|
(88,807
|
) |
|
(99,433
|
)
|
||||||||||
(Increase) decrease in marketable securities held in the life insurance business
|
(64,034
|
) |
|
(124,270
|
)
|
—
|
|
—
|
|
(64,034
|
) |
|
(124,270
|
)
|
||||||||||
Other
|
(10,334
|
) |
|
10,021
|
|
(194,002
|
) |
|
(84,346
|
)
|
(204,227
|
) |
|
(75,940
|
)
|
|||||||||
Net cash provided by (used in) operating activities
|
521,678
|
|
604,240
|
|
753,439
|
|
762,850
|
|
1,258,738
|
|
1,349,745
|
|
||||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Payments for purchases of fixed assets
|
(18,610
|
) |
|
(21,822
|
)
|
(294,044
|
) |
|
(420,149
|
)
|
(312,644
|
) |
|
(439,761
|
)
|
|||||||||
Payments for investments and advances
|
(1,078,250
|
) |
|
(1,319,888
|
)
|
(53,525
|
) |
|
(48,853
|
)
|
(1,131,775
|
) |
|
(1,367,915
|
)
|
|||||||||
Proceeds from sales or return of investments and collections of advances
|
309,498
|
|
343,740
|
|
84,909
|
|
94,813
|
|
394,407
|
|
438,553
|
|
||||||||||||
Other
|
287
|
|
8,873
|
|
(257,719
|
) |
|
11,100
|
|
(257,433
|
) |
|
16,845
|
|
||||||||||
Net cash provided by (used in) investing activities
|
(787,075
|
) |
|
(989,097
|
)
|
(520,379
|
) |
|
(363,089
|
)
|
(1,307,445
|
) |
|
(1,352,278
|
)
|
|||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Increase (decrease) in borrowings, net
|
160,902
|
|
193,709
|
|
(325,247
|
) |
|
(79,572
|
)
|
(164,341
|
) |
|
113,724
|
|
||||||||||
Increase (decrease) in deposits from customers, net
|
246,945
|
|
258,720
|
|
—
|
|
—
|
|
246,945
|
|
258,720
|
|
||||||||||||
Dividends paid
|
(26,100
|
) |
|
(27,189
|
)
|
(38,067
|
) |
|
(49,574
|
)
|
(38,067
|
) |
|
(49,574
|
)
|
|||||||||
Other
|
112
|
|
61
|
|
(157,799
|
) |
|
(247,754
|
)
|
(167,421
|
) |
|
(257,212
|
)
|
||||||||||
Net cash provided by (used in) financing activities
|
381,859
|
|
425,301
|
|
(521,113
|
) |
|
(377,080
|
)
|
(122,884
|
) |
|
65,658
|
|
||||||||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
—
|
|
52,465
|
|
(21,643
|
)
|
52,465
|
|
(21,643
|
)
|
||||||||||||
Net increase (decrease) in cash and cash equivalents, including restricted
|
116,462
|
|
40,444
|
|
(235,588
|
) |
|
1,038
|
|
(119,126
|
) |
|
41,482
|
|
||||||||||
Cash and cash equivalents, including restricted, at beginning of the fiscal year
|
393,133
|
|
509,595
|
|
1,199,806
|
|
964,218
|
|
1,592,939
|
|
1,473,813
|
|
||||||||||||
Cash and cash equivalents, including restricted, at end of the fiscal year
|
509,595
|
|
550,039
|
|
964,218
|
|
965,256
|
|
1,473,813
|
|
1,515,295
|
|
||||||||||||
Less — restricted cash and cash equivalents, included in other current assets and other assets
|
—
|
|
—
|
|
3,740
|
|
2,938
|
|
3,740
|
|
2,938
|
|
||||||||||||
Cash and cash equivalents at end of the fiscal year
|
509,595
|
|
550,039
|
|
960,478
|
|
962,318
|
|
1,470,073
|
|
1,512,357
|
|
||||||||||||
B.
|
Liquidity and Capital Resources
|
C.
|
Research and Development
|
|
Fiscal year ended March 31
|
|||||||
|
2019
|
2020
|
|
|||||
|
(Yen in billions)
|
|||||||
R&D costs
|
|
|
|
|
|
|
||
G&NS
|
116.3
|
|
126.7
|
|
||||
EP&S
|
162.8
|
|
145.9
|
|
||||
I&SS
|
124.2
|
|
143.5
|
|
||||
Corporate R&D
|
45.9
|
|
44.1
|
|
||||
Total
|
481.2
|
|
499.3
|
|
||||
D.
|
Trend Information
|
• |
Content and
Direct-to-Consumer
(“DTC”) businesses that “move people’s hearts”
|
• | Branded Hardware and CMOS (complementary metal oxide semiconductor) image sensors that “connect people to people” |
• | Automotive sensing, medical and financial services businesses that “support people” |
• | Launch of “Sony Group Corporation” as Sony Group headquarters (Effective April 1, 2021) |
• | Sony Corporation will change its company name to “Sony Group Corporation” as of April 1, 2021. |
• | Sony Corporation currently operates as the headquarters of the Sony Group, and provides headquarters support functions for its electronics business. As a result of the separation and redefinition of these functions, “Sony Group Corporation” will operate as the sole headquarters of the Sony Group. |
• | With the objective of increasing the corporate value of the entire Sony Group from a long-term perspective, the key missions of “Sony Group Corporation” will be: (1) business portfolio management and strategic capital allocation, (2) value creation through group synergies and business incubation, and (3) investment in talent and technology that form the foundations of innovation. Further details regarding specific functions, organizational structure and personnel will be determined by April 2021. |
• | The decision to change the company name and amend a part of the Articles of Incorporation was approved at the Ordinary General Meeting of Shareholders held on June 26, 2020. |
• | Sony Electronics Corporation to inherit the “Sony Corporation” company name (Effective April 1, 2021) |
• | In conjunction with the launch of “Sony Group Corporation” on April 1, 2021, Sony Electronics Corporation, which currently operates the electronics business (the EP&S segment) which was the origin of Sony’s business as a whole, will inherit the company name “Sony Corporation.” |
• | Sony Electronics Corporation was established as an intermediate holding company overseeing various Sony electronics subsidiaries effective April 1, 2020. Going forward, Sony Electronics Corporation will proceed with the realignment of its business entities and platform organizations and optimize its structure, talent and business portfolio, while further enhancing competitiveness and promoting new business creation. |
• | Financial Services business to become a wholly-owned subsidiary |
• | In order to achieve further growth and strengthen governance within the financial services business with the goal of enhancing the corporate value of the entire Sony Group, Sony Corporation resolved to make a tender offer for all of the common shares and related stock acquisition rights of SFH not held by Sony Corporation, of which it currently owns an approximately 65% stake, with a view to making SFH a wholly-owned subsidiary. Sony Corporation commenced the tender offer on May 20, 2020. Please also refer to Note 30 of the consolidated financial statements. |
• | The financial services business is a core business that is integral to the long-term growth strategies of the Sony Group. SFH has maintained its position as a listed subsidiary primarily considering its ability to flexibly procure capital for growth. However, Sony has decided to make a tender offer with the aim of making SFH a wholly-owned subsidiary in order to ensure the implementation of optimized strategies for each business, and to drive further group-wide synergies rather than continue to operate the business within certain constraints as a listed subsidiary. |
• |
The two keywords for the future direction of PlayStation
®
are “immersive” and “seamless.”
|
• | The launch of PS5, scheduled for the 2020 holiday season, will deliver even more immersive experiences on a game console. In particular, higher speed achieved through improved computational power and a customized ultra-fast broadband solid state drive (SSD), enhanced sensory perceptions generated by the new revolutionary controller, and sound delivered in diverse and sophisticated 3D audio will combine to realize next-generation console game experiences unlike anything before. |
• | PS Now, a cloud streaming game service, and “Remote Play” functionality will provide a seamless game experience to users anytime and anywhere. |
• | Sony will pursue its mission to make PlayStation “The Best Place to Play” by leveraging the latest computing, streaming, cloud and 5G technologies, together with excellent content. |
• | To maximize the business opportunities from the continuing growth of the subscription digital streaming market, Sony will seek to reinforce the quality and quantity of its music catalog, while also discovering and nurturing new artists to generate new music content. |
• | The music business is expected to grow steadily due to the strengthening of the music publishing business through the consolidation of EMI in the fiscal year ended March 31, 2019 as well as the growth of the streaming market. |
• | The Sony Music Group, which combines the recorded music and the music publishing businesses outside of Japan, was established in August 2019. With a vision to become the most talent-friendly music company, the Sony Music Group will continue to support artists from all directions. |
• | Within Sony’s music business in Japan, Sony has created hits in diverse IP areas such as music, Japanese animation (“anime”) and character merchandising, and also plans to enhance its artist management business. |
• | As new DTC services are continuing to be introduced across the industry and demand for content is ever-increasing, Sony is investing in the development of owned IP and strengthening its creative capacity, as well as continuing to produce outstanding video content across diverse genres. |
• |
Sony will continue to closely monitor the impact from the spread of
COVID-19
on the consumption of video content going forward, while working with the creative community and its supply chain partners, including exhibitors, towards resuming theatrical release of its films.
|
• | Sony aims to engage in group-wide efforts to deliver anime to audiences around the world through its anime DTC services. |
• | In China, where growth in digital entertainment is expected, Sony will strive to strengthen its relationships with local companies in areas such as anime, games and music. |
• | Sony defines the products that bear the Sony brand, including television, audio and video products, still and video cameras, as well as smartphones, collectively as Branded Hardware. Sony continues to introduce products and services that deliver the value of Reality (spatial value) and Real-Time (time value) through sound, video and communication technologies. Additionally, Sony will aim to address the increasing need for remote solutions that connect people to people, and people to things. |
• | In the medical business, Sony will reinforce its efforts to contribute to the health of people over the long-term by leveraging the imaging, display and mechatronics technologies which it has cultivated over many years. |
• |
In light of the impact from the spread of
COVID-19
on product demand and supply chains, Sony will engage in initiatives designed to enhance its business structure in response to changes in the business environment.
|
• |
Sony expects that the
mid-
to long-term demand for CMOS image sensors will continue to grow due to the adoption of multiple sensors and
larger-sized
sensors in smartphones. Although Sony is carefully reviewing investment in greater production capacity, taking into account the uncertain market environment mainly resulting from the impact of the spread of
COVID-19,
its goal of maintaining the global number one position in imaging applications, and becoming the global number one position in sensing remains unchanged.
|
• |
Sony is also strengthening its focus on sensing solutions for mobile devices that “connect people to people,” such as
Time-of-Flight
sensors, and automotive sensing solutions that “support people,” which are expected to grow over the long term.
|
• | Based on its belief that CMOS image sensors will be key devices in the AI era, Sony intends to leverage its world-leading stacked CMOS image sensor technology and provide AI sensing solutions that deliver new value across a wide range of applications. |
• |
Under the new SFH management team, initiatives will include measures to further increase the value generated by the Lifeplanner
®
sales employees who constitute the core value of the life insurance business.
|
• | Sony will also explore further opportunities for synergies including leveraging Sony’s technology in the Financial Services segment. |
• | Formulate targets and implement initiatives that leverage the distinctive characteristics of Sony’s businesses. Among these, reduce annual energy consumption by an average of 30% (compared to levels at the fiscal year ended March 31, 2014) in its products in the G&NS, EP&S and I&SS segments, and in the Music and Pictures segments, continue to look to use its content to raise awareness of sustainability issues and inspire environmentally conscious actions; |
• | Enhance efforts to reduce Sony’s environmental footprint across its entire value chain, including manufacturing partners and suppliers, by calling on them to reduce greenhouse gas (GHG) emissions and water consumption; and |
• | Accelerate the use of renewable energy. |
E.
|
Off-balance
Sheet Arrangements
|
F.
|
Contractual Obligations, Commitments, and Contingent Liabilities
|
|
Total
|
|
Less than
1 year
|
1 to 3
years
|
3 to 5
years
|
More than
5 years
|
||||||||||||||
|
(Yen in millions)
|
|||||||||||||||||||
Contractual obligations and commitments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Short-term debt (Note 11)
|
|
810,176
|
|
810,176
|
—
|
—
|
—
|
|||||||||||||
Long-term debt (Notes 8 and 11)
|
|
|
|
|
|
|
|
|||||||||||||
Finance lease obligations and other
|
|
56,350
|
|
14,216
|
15,593
|
10,011
|
16,530
|
|||||||||||||
Other long-term debt
|
|
608,423
|
|
15,591
|
373,126
|
114,953
|
104,753
|
|||||||||||||
Interest on other long-term debt
|
|
4,409
|
|
1,489
|
1,075
|
729
|
1,116
|
|||||||||||||
Operating lease obligations, including imputed interest (Note 8)
|
|
424,965
|
|
76,469
|
125,254
|
70,967
|
152,275
|
|||||||||||||
Purchase commitments (Note 28)
|
|
|
|
|
|
|
|
|||||||||||||
Contracts for the production or purchase of motion pictures, television programming or certain rights and rights to broadcast certain live action sporting events
|
|
126,917
|
|
56,385
|
52,372
|
17,480
|
680
|
|||||||||||||
Contracts with recording artists, songwriters and companies
|
|
128,678
|
|
56,662
|
33,360
|
16,576
|
22,080
|
|||||||||||||
Sponsorship contracts related to advertising and promotional rights
|
|
5,162
|
|
4,602
|
560
|
—
|
—
|
|||||||||||||
Long-term contracts for development, distribution and publishing of game software
|
|
29,243
|
|
5,083
|
4,571
|
5,115
|
14,474
|
|||||||||||||
Purchase commitments for fixed assets, materials, and other
|
|
394,911
|
|
255,587
|
88,711
|
47,314
|
3,299
|
|||||||||||||
Future insurance policy benefits and other and policyholders’ account in the life insurance business* (Note 10)
|
|
26,457,407
|
|
594,903
|
1,299,026
|
1,370,756
|
23,192,722
|
|||||||||||||
Gross unrecognized tax benefits** (Note 22)
|
|
41,268
|
|
—
|
—
|
—
|
—
|
|||||||||||||
Total
|
|
29,087,909
|
|
1,891,163
|
1,993,648
|
1,653,901
|
23,507,929
|
• | The total amount of expected future pension payments is not included as such amount is not currently determinable. Sony expects to contribute approximately 2 billion yen to Japanese defined benefit pension plans and approximately 8 billion yen to foreign defined benefit pension plans during the fiscal year ending March 31, 2021. Refer to Note 15 of the consolidated financial statements. |
• | The total unused portion of the line of credit extended under loan agreements in the Financial Services segment is not included in the above table as it is not foreseeable what loans will be incurred under such line of credit. The total unused portion of the line of credit extended under these contracts was approximately 34.3 billion yen as of March 31, 2020. Refer to Note 28 of the consolidated financial statements. |
• | Purchases made during the ordinary course of business from certain component manufacturers and contract manufacturers in order to establish the best pricing and continuity of supply for Sony’s production are not included as there are typically no binding purchase obligations. Purchase obligations are defined as contractual obligations to purchase goods or services that are enforceable and legally binding on Sony. These obligations specify all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum, or variable price provisions; and the approximate timing of the transaction. Purchase obligations do not include contracts that may be cancelled without penalty. These purchases include arrangements with certain component manufacturers whereby Sony procures goods, including product components, for these component manufacturers and is reimbursed for the related purchases. This allows Sony’s supply chain management to have flexible and mutually beneficial purchase arrangements with these manufacturers in order to minimize inventory risk. Consistent with industry practice, Sony purchases processed goods that meet technical criteria from these component manufacturers after issuing to these manufacturers information on Sony’s projected demand and manufacturing needs. |
|
Yen in millions
|
|
||
Game & Network Services
|
170,974
|
|||
Music
|
391,325
|
|||
Pictures
|
152,374
|
|||
Electronics Products & Solutions
|
12,189
|
|||
Imaging & Sensing Solutions
|
46,192
|
|||
Financial Services
|
10,834
|
|||
Total
|
783,888
|
|||
• | The discount rates ranged from 5.2% to 10.8%. A hypothetical one percentage point increase in the discount rate, holding all other assumptions constant, would not have resulted in an impairment. |
• | The growth rates applied to the terminal values for reporting units within the G&NS, EP&S and I&SS and Financial Services segments ranged from approximately 1.0% to 1.5%. The growth rates beyond the MRP period for the reporting units in the Music segment ranged from 0% to 5.2%, and in the Pictures segment ranged from 3.0% to 4.5%. A hypothetical one percentage point decrease in the growth rate, holding all other assumptions constant, would not have resulted in an impairment. |
• | The earnings multiple used to calculate the terminal value in the Pictures reporting units ranged from 9.0x to 10.0x. A hypothetical reduction in the earnings multiple by 1.0x, holding all other assumptions constant, would not have resulted in an impairment. |
Change in assumption
|
Projected benefit
obligations |
|
Pension
costs |
|
Net income
|
|
||||||
|
(Yen in billions)
|
|||||||||||
25 basis point increase / decrease in discount rate
|
-/+18.6
|
+
/-0.2
|
-/+0.1
|
|||||||||
25 basis point increase / decrease in expected long-term rate of return on pension plan assets
|
—
|
-/+1.1
|
+/-0.7
|
Item 6.
|
Directors, Senior Management and Employees
|
A.
|
Directors and Senior Management
|
Responsibility as an Officer: Senior EVP, Officer in charge of Human Resources and General Affairs
|
||
Date of Birth: April 23, 1961
|
||
Number of Years Served as a Corporate Executive Officer: 4 years
|
||
Principal Business Activities Outside Sony: None
|
||
Brief Personal History:
|
||
April 1984
|
Joined Sony Corporation
|
|
October 2001
|
Vice President, Sony Ericsson Mobile Communications
|
|
April 2006
|
Senior Vice President, Sony Corporation of America
|
|
November 2014
|
SVP, Corporate Executive, Sony Corporation
|
|
June 2016
|
EVP, Corporate Executive Officer, Sony Corporation
|
|
June 2020
|
Senior EVP, Corporate Executive Officer, Sony Corporation (present)
|
B.
|
Compensation
|
|
Fixed remuneration
|
|
Remuneration linked to business results
|
|
Phantom restricted stock plan
|
||||||||||||||||||||||||
|
Number of
persons |
|
Amount
(Yen in millions) |
|
Number of
persons |
|
Amount
(Yen in millions) |
|
Number of
persons |
|
Amount
(Yen in millions) |
||||||||||||||||||
Directors
|
14
|
|
210
|
|
—
|
|
—
|
|
3
|
|
111
|
||||||||||||||||||
|
(*1) (*2)
|
|
|
|
|
|
|
(*3)
|
|
|
|
|
|
|
|||||||||||||||
(Outside Directors)
|
(12)
|
|
(174)
|
|
(—)
|
|
(—)
|
|
(3)
|
|
(111)
|
||||||||||||||||||
Corporate Executive Officers
|
5
|
|
360
|
|
5
|
|
446
|
|
—
|
|
—
|
||||||||||||||||||
|
(*2)
|
|
|
|
|
|
(*4)
|
|
|
|
|
||||||||||||||||||
Total (*6)
|
19
|
|
570
|
|
5
|
|
446
|
|
3
|
|
111
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
(*5)
|
Name
|
Position (*1)
|
Fixed Remuneration
(*2)
(Yen in millions)
|
Remuneration
linked to
business results
(*2) (*3)
(Yen in millions)
|
Phantom restricted
stock plan
(Yen in millions)
|
Total (*2)
(Yen in millions)
|
Granted number of
stock acquisition
rights (*4)
(Ten thousand shares)
|
|
Granted number of
restricted stock
(*5)
(Ten thousand shares)
|
|||||||||||||||||||
Kenichiro Yoshida
|
Sony Corporation
Director, Chairman, President & CEO, and Representative Corporate Executive Officer (*6) (*7)
|
175
|
279
|
—
|
454
|
15
|
5
|
||||||||||||||||||||
Hiroki Totoki
|
Sony Corporation
Director, Executive Deputy President & CFO, and Representative Corporate Executive Officer (*6) (*7)
|
59
|
56
|
—
|
115
|
3
|
1.5
|
||||||||||||||||||||
Toru Katsumoto
|
Sony Corporation
Executive Deputy President, Corporate Executive Officer (*7)
|
48
(*8)
|
46
(*8)
|
—
|
93
(*8)
|
2
|
1
|
||||||||||||||||||||
Shiro Kambe
|
Sony Corporation
Senior Executive Vice President, Corporate Executive Officer
|
42
|
39
|
—
|
81
|
2
|
0.6
|
||||||||||||||||||||
Kazushi Ambe
|
Sony Corporation
Senior Executive Vice President, Corporate Executive Officer
|
40
|
36
|
—
|
75
|
2
|
0.6
|
• | Attracting and retaining an adequate talent pool of Directors possessing the requisite abilities to excel in the global marketplace; and |
• | Ensuring the effectiveness of the supervisory function of Directors. |
• | Fixed remuneration; |
• | Remuneration linked to stock price; and |
• | Phantom Restricted Stock Plan. |
• | Attracting and retaining an adequate talent pool possessing the requisite abilities to excel in the global marketplace; and |
• | Providing effective incentives to improve business results on a short-, medium- and long- term basis. |
• | Fixed remuneration; |
• | Remuneration linked to business results; |
• | Remuneration linked to stock price; and |
• | Phantom Restricted Stock Plan. |
C.
|
Board Practices
|
Name
|
Position
|
||
Kenichiro Yoshida
|
Director
|
||
Hiroki Totoki
|
Director
|
||
Shuzo Sumi
|
Chairman of the Board
Outside Director
|
||
Tim Schaaff
|
Non-Executive
Director
|
||
Kazuo Matsunaga
|
Vice Chairman of the Board
Outside Director
|
||
Toshiko Oka
|
Outside Director
|
||
Sakie Akiyama
|
Outside Director
|
||
Wendy Becker
|
Outside Director
|
||
Yoshihiko Hatanaka
|
Outside Director
|
||
Adam Crozier
|
Outside Director
|
||
Keiko Kishigami
|
Outside Director
|
||
Joseph A. Kraft Jr.
|
Outside Director
|
(a) | He/she shall not be a director, a statutory auditor, a corporate executive officer, a general manager or other employee of any company in competition with Sony in any of Sony’s principal businesses (a “Competing Company”) or own 3% or more of the shares of any Competing Company. |
(b) | He/she shall not be or have been a representative partner or partner of Sony’s independent auditor the past three years before being nominated as a Director. |
(c) | He/she shall not have any connection with any matter that may cause a material conflict of interest in performing the duties of a Director. |
(a) | He/she shall not have received directly from Sony, during any consecutive twelve-month period within the last three years, more than an amount equivalent to U.S. $120,000, other than Director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service). |
(b) | He/she shall not be an executive director, corporate executive officer, general manager or other employee of any company whose aggregate amount of transactions with Sony, in any of the last three fiscal years, exceeds the greater of an amount equivalent to U.S. $1,000,000, or 2% of the annual consolidated sales of such company. |
(i) |
In a case where a
non-executive
Director is liable to the company after the execution of the liability limitation agreement for damages pursuant to Article 423, Paragraph 1 of the Companies Act, such liabilities shall be limited to the greater of either 30 million yen or an amount equal to the aggregate sum of the amounts prescribed in each item of Article 425, Paragraph 1 of the Companies Act, only where the
non-executive
Director acted in good faith without any gross negligence in performing his/her duties as a Director of the company.
|
(ii) |
In a case where a
non-executive
Director is reelected as a
non-executive
Director of the company and reassumes his/her office as such on the expiration of the term of his/her office as a
non-executive
Director of the company, the liability limitation agreement shall continue to be effective after the reelection and
re-assumption
without any action or formality.
|
(1) | Members: 4 Directors including 3 outside Directors (as of June 26, 2020) |
Name
|
Position
|
||
Shuzo Sumi
|
Chairman of the Nominating Committee
(Outside Director)
|
||
Adam Crozier
|
Nominating Committee Member
(Outside Director)
|
||
Yoshihiko Hatanaka
|
Nominating Committee Member
(Outside Director)
|
||
Kenichiro Yoshida
|
Nominating Committee Member
(Director)
|
Name
|
Position
|
||
Kazuo Matsunaga
|
Chairman of the Audit Committee
(Outside Director)
|
||
Toshiko Oka
|
Audit Committee Member
(Outside Director)
|
||
Keiko Kishigami
|
Audit Committee Member
(Outside Director)
|
Name
|
Position
|
||
Wendy Becker
|
Chairman of the Compensation Committee
(Outside Director)
|
||
Sakie Akiyama
|
Compensation Committee Member
(Outside Director)
|
||
Joseph A. Kraft Jr.
|
Compensation Committee Member
(Outside Director)
|
• | Reviewed relevant material, such as the minutes of Board meetings, and attended a Board meeting; |
• | Confirmed with the Board secretariat office and each Committee’s secretariat office how meetings of the Board and Committees were conducted; |
• | Gathered responses to a questionnaire from each Director about the current status and practices of the Board and each Committee, such as the composition of the Board, operation of the Board, commitments of each Director, activities of each Committee and procedures of the previous Evaluation; |
• | Interviewed the Chairman of the Board, newly-appointed Directors, a Director who is concurrently in the position of the CEO, and certain additional Directors about the Board and Committee status and practices; and |
• | Researched other global companies’ practices in Japan, the United States and Europe, and compared them with the company’s practices. |
• |
Enhanced diversity in the boardroom (by newly appointing two
non-Japanese
and one female Directors as outside Directors);
|
• | Continuously made periodic reports to the Board on ESG (Environment, Social and Governance) related matters; |
• | Focused on information security continuously through the Director in charge of Information Security; |
• | Held additional executive sessions; |
• | Expanded disclosure regarding compensation of Directors and Senior Executives; and |
• | Conducted visiting audits by Audit Committee members at Sony’s business sites. |
D.
|
Employees
|
|
March 31
|
|||||||||||
|
2018
|
2019
|
2020
|
|
||||||||
By segment:
|
|
|||||||||||
G&NS, EP&S and I&SS total
|
77,400
|
75,600
|
|
73,000
|
|
|||||||
Music
|
8,200
|
8,500
|
|
9,900
|
|
|||||||
Pictures
|
9,800
|
9,300
|
|
8,400
|
|
|||||||
Financial Services
|
11,400
|
11,800
|
|
12,300
|
|
|||||||
All Other
|
5,300
|
4,000
|
|
3,200
|
|
|||||||
Unallocated — Corporate employees
|
5,200
|
5,200
|
|
4,900
|
|
|||||||
By region:
|
|
|
|
|||||||||
Japan
|
51,500
|
52,200
|
|
53,700
|
|
|||||||
Outside of Japan
|
65,800
|
62,200
|
|
58,000
|
|
|||||||
Total
|
117,300
|
114,400
|
|
111,700
|
|
|||||||
E.
|
Share Ownership
|
Year granted
(Fiscal year ended March 31)
|
Total number of
shares subject to stock acquisition rights |
|
Exercise price per share
|
|
||||
|
(in thousands)
|
|
|
|
||||
2020
|
240
|
6,705 yen
|
||||||
2019
|
230
|
6,440 yen
|
||||||
2018
|
208
|
5,231 yen
|
||||||
2017
|
244
|
3,364 yen
|
||||||
2016
|
58
|
3,404 yen
|
||||||
2015
|
114
|
2,410.5 yen
|
||||||
2014
|
10
|
2,007 yen
|
||||||
2012
|
7
|
1,523 yen
|
||||||
2011
|
3
|
2,945 yen
|
Item 7.
|
Major Shareholders and Related Party Transactions
|
A.
|
Major Shareholders
|
Date of Report*
|
Reported entities
|
Reported number of direct or
indirect owned and deemed owned shares** |
|
Reported percentage of direct or
indirect owned and deemed owned shares** |
|
|||||
March 22, 2017
|
BlackRock Japan Co., Ltd.
|
79,184,569
|
6.27
|
|||||||
September 20, 2019
|
Sumitomo Mitsui Trust Asset Management Co., Ltd.
|
72,545,958
|
5.70
|
B.
|
Related Party Transactions
|
C.
|
Interests of Experts and Counsel
|
Item 8.
|
Financial Information
|
A.
|
Consolidated Statements and Other Financial Information
|
B.
|
Significant Changes
|
Item 9.
|
The Offer and Listing
|
A.
|
Offer and Listing Details
|
B.
|
Plan of Distribution
|
C.
|
Markets
|
D.
|
Selling Shareholders
|
E.
|
Dilution
|
F.
|
Expenses of the Issue
|
Item 10.
|
Additional Information
|
A.
|
Share Capital
|
B.
|
Memorandum and Articles of Association
|
(i) | manufacture and sale of electronic and electrical machines and equipment, medical instruments, optical instruments and other equipment, machines and instruments; |
(ii) | planning, production and sale of audio-visual software and computer software programs; |
(iii) | manufacture and sale of metal industrial products, chemical industrial products and ceramic industrial products, textile products, paper products and wood-crafted articles, daily necessities, foodstuffs and toys, transportation machines and equipment, and petroleum and coal products; |
(iv) | real estate activities, construction business, transportation business and warehousing business; |
(v) | publishing business and printing business; |
(vi) | advertising agency business, insurance agency business, broadcasting enterprise, recreation business such as travel, management of sporting facilities, etc. and other service enterprises; |
(vii) | financial business; |
(viii) | Type I and Type II telecommunications business under the Telecommunications Business Law; |
(ix) | investing in stocks and bonds, etc.; |
(x) | manufacture, sale, export and import of products which are incidental to or related to those mentioned above; |
(xi) | rendering of services related to those mentioned above; |
(xii) | investment in businesses mentioned above operated by other companies or persons; and |
(xiii) | all businesses which are incidental to or related to those mentioned above. |
“A” =
|
|
the total amount of other capital surplus and other retained earnings, each such amount being that appearing on the
non-consolidated
balance sheet as of the end of the last business year
|
||||
“B” =
|
|
(if Sony Corporation has disposed of its treasury stock after the end of the last business year) the amount of the consideration for such treasury stock received by Sony Corporation less the book value thereof
|
||||
“C” =
|
|
(if Sony Corporation has reduced its stated capital after the end of the last business year) the amount of such reduction less the portion thereof that has been transferred to additional
paid-in
capital or legal reserve (if any)
|
||||
“D” =
|
|
(if Sony Corporation has reduced its additional
paid-in
capital or legal reserve after the end of the last business year) the amount of such reduction less the portion thereof that has been transferred to stated capital (if any)
|
||||
“E” =
|
|
(if Sony Corporation has cancelled its treasury stock after the end of the last business year) the book value of such treasury stock
|
||||
“F” =
|
|
(if Sony Corporation has distributed Surplus to its shareholders after the end of the last business year) the total book value of the Surplus so distributed
|
||||
“G” =
|
|
certain other amounts set forth in ordinances of the Ministry of Justice, including (if Sony Corporation has reduced Surplus and increased its stated capital, additional
paid-in
capital or legal reserve after the end of the last business year) the amount of such reduction and (if Sony Corporation has distributed Surplus to the shareholders after the end of the last business year) the amount set aside in additional
paid-in
capital or legal reserve (if any) as required by ordinances of the Ministry of Justice.
|
(a) | the book value of its treasury stock; |
(b) | the amount of consideration for any of treasury stock disposed of by Sony Corporation after the end of the last business year; and |
(c) |
certain other amounts set forth in ordinances of the Ministry of Justice, including (if the sum of
one-half
of goodwill and the deferred assets exceeds the total of stated capital, additional
paid-in
capital and legal reserve, each such amount being that appearing on the
non-consolidated
balance sheet as of the end of the last business year) all or certain part of such exceeding amount as calculated in accordance with ordinances of the Ministry of Justice.
|
(1) | acquisition of its own shares from a specific party other than its subsidiaries; |
(2) | consolidation of shares; |
(3) | any offering of new shares or existing shares held by Sony Corporation as treasury stock at a “specially favorable” price (or any offering of stock acquisition rights to acquire shares of capital stock, or bonds with stock acquisition rights on “specially favorable” conditions) to any persons other than shareholders; |
(4) | the exemption of liability of a Director, Corporate Executive Officer or independent auditor with certain exceptions; |
(5) | a reduction of stated capital with certain exceptions; |
(6) |
a distribution of
in-kind
dividends which meets certain requirements;
|
(7) | dissolution, merger, consolidation, or corporate split with certain exceptions; |
(8) | the transfer of the whole or a material part of the business; |
(9) | the transfer of the whole or a part of the shares or equity interests in a subsidiary which meets certain requirements; |
(10) | the taking over of the whole of the business of any other corporation with certain exceptions; or |
(11) | share exchange or share transfer for the purpose of establishing 100% parent-subsidiary relationships with certain exceptions, |
C.
|
Material Contracts
|
D.
|
Exchange Controls
|
(i) | the aggregate purchase price of the relevant shares is 100 million yen or less; |
(ii) | the acquisition is effected through any bank, financial instruments business operator or other entity prescribed by the Foreign Exchange Regulations acting as an agent or intermediary; or |
(iii) | the acquisition constitutes an “inward direct investment” described below (in which case a prior notification requirement may apply). |
(i) | individuals who reside within Japan; or |
(ii) | corporations whose principal offices are located within Japan. |
(i) | individuals who do not reside in Japan; or |
(ii) | corporations whose principal offices are located outside Japan. |
(i) |
individuals who are exchange
non-residents;
|
(ii) | corporations or other entities that are organized under the laws of foreign countries or whose principal offices are located outside Japan; |
(iii) | corporations of which 50% or more of the total voting rights are held, directly or indirectly, by individuals and/or corporations falling within (i) and/or (ii) above; |
(iv) | partnerships under the Civil Code of Japan established to invest in corporations, limited partnerships for investment under the Limited Partnership Act for Investment of Japan or any other similar partnerships under foreign law of which (a) 50% or more of the total contributions are made by individuals and/or corporations falling within (i), (ii), (iii) above and/or (v) below or any other persons prescribed under the Foreign Exchange Regulations or (b) a majority of the general partners are individuals and/or corporations falling within (i), (ii), (iii) above and/or (v) below or any other persons prescribed under the Foreign Exchange Regulations; or |
(v) |
corporations or other entities, a majority of whose directors or other officers (or directors or other officers having the power of representation) are individuals who are exchange
non-residents.
|
(i) | the foreign investor or its related persons will not become directors or corporate auditors of the relevant corporation; |
(ii) | the foreign investor will not make certain proposals (as prescribed in the Foreign Exchange Regulations) at the general meeting of shareholders, including transfer or discontinuation of the Designated Businesses of the relevant corporation; and |
(iii) |
the foreign investor will not access
non-public
technical information in relation to the Designated Businesses of the relevant corporation, or take certain other actions that may lead to the leak of such
non-public
technical information (as prescribed in the Foreign Exchange Regulations).
|
(i) | the foreign investor will not attend, or not cause any persons designated by it to attend, meetings of the relevant corporation’s board of directors, or meetings of committees having authority to make important decisions, in respect of the Core Sector Designated Businesses of the relevant corporation; and |
(ii) | the foreign investor will not make, or not cause any persons designated by it to make, proposals to such board or committees or their members in writing or electronic form requesting any response or actions by certain deadlines in respect of the Core Sector Designated Businesses of the relevant corporation. |
E.
|
Taxation
|
(i) | is a resident of the U.S. for purposes of the Treaty; |
(ii) | does not maintain a permanent establishment in Japan (a) with which shares of Common Stock or ADSs of Sony Corporation are effectively connected and through which the U.S. holder carries on or has carried on business or (b) of which shares of Common Stock or ADSs of Sony Corporation form part of the business property; and |
(iii) | is eligible for benefits under the Treaty with respect to income and gain derived in connection with shares of Common Stock or ADSs of Sony Corporation. |
F.
|
Dividends and Paying Agent
|
G.
|
Statement by Experts
|
H.
|
Documents on Display
|
I.
|
Subsidiary Information
|
Item 11.
|
Quantitative and Qualitative Disclosures about Market Risk
|
|
June 30,
2019 |
September 30,
2019 |
December 31,
2019 |
March 31,
2020 |
|
|||||||||||
|
(Yen in billions)
|
|||||||||||||||
Net VaR
|
1.2
|
1.2
|
0.9
|
|
1.3
|
|
||||||||||
VaR of currency exchange rate risk
|
1.2
|
1.1
|
0.9
|
|
1.3
|
|
||||||||||
VaR of interest rate risk
|
0.1
|
0.1
|
0.1
|
|
0.1
|
|
||||||||||
VaR of stock price risk
|
0.0
|
0.0
|
0.0
|
|
0.0
|
|
|
June 30,
2019 |
September 30,
2019 |
December 31,
2019 |
March 31,
2020 |
|
|||||||||||
|
(Yen in billions)
|
|||||||||||||||
Net VaR
|
1.3
|
0.9
|
0.8
|
|
1.1
|
|
||||||||||
VaR of currency exchange rate risk
|
1.2
|
0.9
|
0.7
|
|
1.0
|
|
||||||||||
VaR of interest rate risk
|
0.1
|
0.1
|
0.1
|
|
0.1
|
|
||||||||||
VaR of stock price risk
|
0.0
|
0.0
|
0.0
|
|
0.0
|
|
|
June 30,
2019 |
September 30,
2019 |
December 31,
2019 |
March 31,
2020 |
|
|||||||||||
|
(Yen in billions)
|
|||||||||||||||
Net VaR
|
0.8
|
0.6
|
0.5
|
|
0.8
|
|
||||||||||
VaR of currency exchange rate risk
|
0.8
|
0.6
|
0.5
|
|
0.8
|
|
||||||||||
VaR of interest rate risk
|
0.0
|
0.0
|
0.0
|
|
0.0
|
|
||||||||||
VaR of stock price risk
|
0.0
|
0.0
|
0.0
|
|
0.0
|
|
Item 12.
|
Description of Securities Other Than Equity Securities
|
A.
|
Debt Securities
|
B.
|
Warrants and Rights
|
C.
|
Other Securities
|
D.
|
American Depositary Shares
|
Service
|
Rate
|
By Whom Paid
|
||
Issuance of ADSs upon deposit of Sony Corporation’s Common Stock
|
Up to 5.00 U.S. dollar per 100 ADSs (or fraction thereof) issued
|
Person depositing Sony Corporation’s Common Stock or person receiving ADSs
|
||
Delivery of deposited securities against surrender of ADSs
|
Up to 5.00 U.S. dollar per 100 ADSs (or fraction thereof) surrendered
|
Person surrendering ADSs for the purpose of withdrawal of deposited securities or person to whom deposited securities are delivered
|
||
Distribution of cash dividends or other cash distributions (i.e., sale of rights and other entitlements)
|
Up to 5.00 U.S. dollar per 100 ADSs (or fraction thereof) held
|
Person to whom distribution is made
|
||
Distribution of ADSs pursuant to (i) stock dividends or other free stock distributions, (ii) exercise of rights to purchase additional ADSs
|
Up to 5.00 U.S. dollar per 100 ADSs (or fraction thereof) held
|
Person to whom distribution is made
|
||
Distribution of securities other than ADSs or rights purchase Additional ADSs (i.e.,
spin-off
shares)
|
Up to 5.00 U.S. dollar per 100 ADSs (or fraction thereof) held
|
Person to whom distribution is made
|
||
ADS Services
|
Up to 5.00 U.S. dollar per 100 ADSs (or fraction thereof) held on the applicable record date(s) established by the Depositary
|
Person holding ADSs on the applicable record date(s) established by the Depositary
|
Item 13.
|
Defaults, Dividend Arrearages and Delinquencies
|
Item 14.
|
Material Modifications to the Rights of Security Holders and Use of Proceeds
|
Item 15.
|
Controls and Procedures
|
(i) | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of Sony; |
(ii) | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and |
expenditures of Sony are being made only in accordance with authorizations of management and directors; and |
(iii) | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Sony’s assets that could have a material effect on the financial statements. |
Item 16.
|
[Reserved]
|
Item 16A.
|
Audit Committee Financial Expert
|
Item 16B.
|
Code of Ethics
|
Item 16C.
|
Principal Accountant Fees and Services
|
|
Fiscal year ended
March 31 |
|||||||
|
2019
|
2020
|
|
|||||
|
Yen in millions
|
|||||||
Audit Fees (1)
|
3,716
|
|
4,011
|
|
||||
Audit-Related Fees (2)
|
480
|
|
400
|
|
||||
Tax Fees (3)
|
0
|
|
0
|
|
||||
All Other Fees (4)
|
197
|
|
118
|
|
||||
|
4,393
|
|
4,529
|
|
||||
(1) | Audit Fees consist of fees for the annual audit services engagement and other audit services, which are those services that only the external auditor can provide. |
(2) | Audit-Related Fees consist of fees billed for assurance and related services, and audit services relating to benefit plans, business acquisitions and dispositions. |
(3) | Tax Fees primarily consist of fees for tax advice. |
(4) | All Other Fees consist of fees primarily for services rendered with respect to advisory services. |
Item 16D.
|
Exemptions from the Listing Standards for Audit Committees
|
Item 16E.
|
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
|
Period
|
(a) Total
number of shares purchased |
|
(b) Average
price paid per share (yen) |
|
(c) Total number of
shares purchased as part of publicly announced plans or programs
*1,2
|
|
(d) Maximum
number of shares that may yet be purchased under the plans or programs
*1,2
|
|
||||||||
April 1 — 30, 2019
|
1,489
|
5,037.13
|
N/A
|
N/A
|
||||||||||||
May 1 — 31, 2019
|
480,832
|
5,429.21
|
479,200
|
59,520,800
|
||||||||||||
June 1 — 30, 2019
|
4,269,608
|
5,325.07
|
4,266,900
|
55,253,900
|
||||||||||||
July 1 — 31, 2019
|
577,002
|
5,872.74
|
573,700
|
54,680,200
|
||||||||||||
August 1 — 31, 2019
|
11,469,846
|
*3
|
5,852.46
|
11,467,300
|
43,212,900
|
|||||||||||
September 1 — 30, 2019
|
4,624,744
|
6,315.99
|
4,622,500
|
38,590,400
|
||||||||||||
October 1 — 31, 2019
|
2,018,014
|
6,309.94
|
2,016,500
|
36,573,900
|
||||||||||||
November 1 — 30, 2019
|
1,422,829
|
6,777.15
|
1,419,800
|
35,154,100
|
||||||||||||
December 1 — 31, 2019
|
1,218,592
|
7,164.95
|
1,212,200
|
33,941,900
|
||||||||||||
January 1 — 31, 2020
|
572,214
|
7,804.01
|
567,800
|
33,374,100
|
||||||||||||
February 1 — 29, 2020
|
340,430
|
7,381.84
|
338,500
|
33,035,600
|
||||||||||||
March 1 — 31, 2020
|
6,095,878
|
*4
|
6,077.24
|
6,094,800
|
N/A
|
|||||||||||
Total
|
33,091,478
|
6,050.24
|
33,059,200
|
N/A
|
• | Total number of shares for repurchase: 60 million shares (maximum) (4.80% of total number of shares issued and outstanding (excluding treasury stock)) |
• | Total purchase price for repurchase of shares: 200 billion yen (maximum) |
• | Period of repurchase: From May 17, 2019 to March 31, 2020 |
• | Total number of shares repurchased: 33,059,200 shares |
• | Total purchase price for repurchased shares: 199,999,200,300 yen |
• | Period of repurchase: May 17, 2019 to March 17, 2020 |
• | Class of shares cancelled: Common stock |
• | Total number of shares cancelled: 12,737,400 shares |
• | Date of cancellation: March 26, 2020 |
Item 16F.
|
Change in Registrant’s Certifying Accountant
|
Item 16G.
|
Disclosure About Differences in Corporate Governance
|
NYSE Standards
|
Sony’s Corporate Governance Practices
|
|
Board Independence.
|
Sony Corporation has adopted the “Company with Three Committees” corporate governance system under the Companies Act. Sony Corporation’s Board Charter requires its board to consist of between 10 to 20 directors.
The Companies Act does not require Sony Corporation to have a majority of “independent” (in the meaning given by the NYSE Corporate Governance Standards) directors on its board; rather, it requires Sony Corporation to have a majority of “outside” directors (the definition of the term “outside” director is summarized below) on each of three statutory committees (the Nominating Committee, the Audit Committee and the Compensation Committee).
|
|
Director Independence.
(i) a person who the board determines has a material direct or indirect relationship with the company, its parent or a consolidated subsidiary;
(ii) a person who, within the last three years, has been an employee of the company or has an immediate family member of an executive officer of the company, its parent or a consolidated subsidiary;
(iii) a person who had received, or whose immediate family member had received, during any
12-month
period within the last three years, more than 120,000 U.S. dollars per year in direct compensation from the company, its parent or a consolidated subsidiary, other than director and committee fees or deferred compensation for prior services (provided such compensation is not contingent in any way on continued service);
(iv) (A) a person who is, or whose immediate family member is, a current partner or employee of a firm that is the company’s internal or external auditor; (B) a person whose immediate family member is a partner of such a firm; (C) a person who has an immediate family member who is a current employee of such a firm and who personally participates in the firm’s audit, assurance or tax compliance (but not tax planning) practice; or (D) a person who was, or has an immediate family member who was, within the last three years, a partner or employee of such a firm and personally worked on the listed company’s audit within that time;
(v) a person who is, or whose immediate family member is, or has been within the last three years, employed as an executive officer of another company where any of
|
“Outside” director is defined in the Companies Act as a person who satisfies all of the requirements (i) through (v) below:
(i) a person who is not a Director of Sony Corporation or any of its subsidiaries engaged in the business operations of Sony Corporation or such subsidiaries, as the case may be, or a Corporate Executive Officer or general manager or other employee (“Group Executive Director, etc.”) of Sony Corporation or any of its subsidiaries and who has not been a Group Executive Director, etc. of Sony Corporation or any of its subsidiaries for ten years prior to assuming his/her office; (ii) if a person who has been a director, accounting counselor (if the accounting counselor is a juridical person, a member who is in charge of the affairs), or corporate auditor of Sony Corporation or any of its subsidiaries (excluding a person who has been a Group Executive Director, etc.) at the time within ten years prior to assuming his/her office, a person who has not been a Group Executive Director, etc. of Sony Corporation or any of its subsidiaries for ten years prior to assuming his/her office as a director, an accounting counselor, or a corporate auditor; (iii) a person who is not a director or a Corporate Executive Officer or general manager or other employee of a parent company or any entity which controls the management of Sony Corporation; (iv) a person who is not a Group Executive Director, etc. of a direct/indirect subsidiary of Sony Corporation or any entity the management of which is directly or indirectly controlled by Sony Corporation; and (v) a person who is not a spouse or relative within the second degree of kinship of a Director or a Corporate Executive Officer or general manager or other employee of Sony Corporation.
|
NYSE Standards
|
Sony’s Corporate Governance Practices
|
|
the listed company’s present executive officers at the same time serves or served on that company’s compensation committee; or
(vi) an executive officer or employee of a company, or has an immediate family member of an executive officer of a company, that makes payments to, or receives payments from, the listed company, its parent or a consolidated subsidiary for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of 1 million U.S. dollars or 2% of such other company’s consolidated gross revenues
|
Under the Companies Act, a director’s status as an “outside” director is unaffected by the director’s compensation, his or her affiliation with business partners, or the board’s affirmative determination of independence. On the other hand, under the Companies Act, a director who has had a career as a management director, corporate executive officer, or other employee of the company, its subsidiaries or other group companies is by definition not an “outside” director.
|
|
|
Sony Corporation’s Board Charter includes a provision requiring that each “outside” director:
(i) Shall not have received directly from Sony Group, during any consecutive
12-month
period within the last three years, more than an amount equivalent to 120,000 U.S. dollars, other than Director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service); and
(ii) Shall not be an executive director, a corporate executive officer, a general manager or other employee of any company whose aggregate amount of transactions with Sony Group, in any of the last three fiscal years, exceeds the greater of an amount equivalent to 1,000,000 U.S. dollars, or 2% of the annual consolidated sales of such company;
|
|
|
In addition, the Securities Listing Regulations of the Tokyo Stock Exchange require Sony Corporation to make efforts to have at least one “Independent Director” on the Board of Directors. “Independent Director” is defined in the Securities Listing Regulations of the Tokyo Stock Exchange as an “outside” director who is unlikely to have conflicts of interest with shareholders. According to the guidelines of the Tokyo Stock Exchange, if a person falls in any of the categories listed below, such person, in principle, will be considered to have a conflict of interest with shareholders of the listed company.
(1)
A person for which the listed company is a major client or a person who executes business of a person for which the listed company is a major client;
(2)
A major client of the listed company or a person who executes business of a major client of the listed company;
(3)
A consultant, accounting professional, or legal professional (or, if such consultant, accounting professional, or legal professional is a juridical person, a member of such juridical person) of
|
|
|
the listed company who receives a large amount of money or other consideration other than remuneration for directorship/auditorship from such listed company;
|
NYSE Standards
|
Sony’s Corporate Governance Practices
|
|
|
(4)
A person who has fallen in any of categories (1) through (3) listed above until recently;
(5)
A person who has fallen in any of categories (a) or (b) listed below for ten years prior to assuming his/her office:
|
|
|
(6)
A close relative of a person who falls in any of categories (a) through (f) listed below (only if such person is significant):
|
|
|
As of June 26, 2020, 9 of the 12 members of Sony Corporation’s Board of Directors qualified as “outside” directors. In addition, all 9 “outside” directors are qualified and designated as “Independent Directors” under the Securities Listing Regulations of the Tokyo Stock Exchange.
|
|
Executive Sessions.
Non-management
directors must meet in regularly scheduled executive sessions without management. Independent directors should meet alone in an executive session at least once a year.
|
An “outside” director, as defined under the Companies Act, is equivalent to a
“non-management
director” under the NYSE rules because an “outside” director does not engage in the execution of business operations of the company.
The
outside/non-management
Directors generally meet several times a year without management, though neither the Companies Act nor Sony Corporation’s Board Charter requires
non-management
Directors to meet regularly without management and there is no requirement for the outside Directors to meet alone in an executive session at least once a year.
|
|
NYSE Standards
|
Sony’s Corporate Governance Practices
|
|
Nominating/Corporate Governance Committee.
|
Sony Corporation’s Nominating Committee shall consist of at least three Directors. Under the Companies Act, the Committee is responsible for determining the contents of proposals regarding the appointment and dismissal of Directors to be submitted for approval to the shareholders’ meeting. Unlike listed U.S. companies under NYSE rules, it is not responsible for developing governance guidelines or overseeing the evaluation of the board and management. Under the Companies Act, a majority of its members shall be “outside” directors, as defined under the Companies Act. Sony Corporation’s Board Charter requires at least one of the Directors on the Committee to be a Corporate Executive Officer.
|
|
Compensation Committee.
|
Sony Corporation’s Compensation Committee shall consist of at least three Directors. Under the Companies Act, a majority of its members shall be “outside” directors, as defined under the Companies Act. Sony Corporation’s Board Charter prohibits the CEO, the COO and/or the CFO (or a person at any equivalent position) from serving on the Compensation Committee. Under the Companies Act, the Committee is responsible for, among others, determining the compensation of each director and Corporate Executive Officer.
|
|
Audit Committee.
10A-3
under the Exchange Act is required. The committee must have at least three members. All members must be independent. The committee must have a charter addressing the committee’s purpose, an annual performance evaluation of the committee and the duties and responsibilities of the committee.
|
Sony Corporation’s Audit Committee shall consist of at least three Directors. Under the Companies Act, a majority of its members shall be “outside” Directors, as defined under the Companies Act. In addition, pursuant to the Companies Act, no member of the Committee shall be a Director of the company or any of its subsidiaries who is engaged in the business operations of the company or such subsidiary, as the case may be, or a corporate executive officer of the company or any of its subsidiaries, or an accounting counselor, general manager or other employee of any of such subsidiaries. Sony Corporation’s Board Charter also requires each member of the Audit Committee to meet the independence requirements of the applicable U.S. securities laws and regulations, and requires at least one member to meet the audit committee financial expert requirements. Currently, all the members of Sony Corporation’s Audit Committee are also “independent” as defined in the NYSE Corporate Governance Standards, and two members of the Committee are qualified as audit
|
NYSE Standards
|
Sony’s Corporate Governance Practices
|
|
|
committee financial experts. Sony Corporation’s Board Charter discourages any Audit Committee member from concurrently being a member of other Committees.
|
|
Equity Compensation Plans.
|
Under the Companies Act, if Sony Corporation wishes to adopt an equity compensation plan under which stock acquisition rights or shares of common stock are granted on specially favorable conditions, except where all of its shareholders are granted rights to subscribe for such stock acquisition rights/shares of common stock or such stock acquisition rights/shares of common stock are gratuitously allocated to all of its shareholders, each on a pro rata basis, then Sony Corporation must obtain shareholder approval by a “special resolution” at a General Meeting of Shareholders, where the quorum is
one-third
of the total number of voting rights of all of its shareholders and the approval by at least
two-thirds
of the number of voting rights of all the shareholders represented at the meeting is required under Sony Corporation’s Articles of Incorporation.
On the other hand, under the Companies Act, if Sony Corporation wishes to adopt an equity compensation plan under which stock acquisition rights or shares of common stock are granted against fair value thereof, such plan can be adopted by the resolution of Sony Corporation’s Compensation Committee, and grants of stock acquisition rights or shares pursuant to such plan may be decided by a resolution of the Board of Directors or a determination by a Corporate Executive Officer to whom the authority to make such determination has been delegated, and no shareholder approval is required.
|
|
Corporate Governance Guidelines.
|
Sony Corporation is required to disclose the status of its corporate governance under the Companies Act, Financial Instruments and Exchange Act and its related regulations, and the Securities Listing Regulations of the Tokyo Stock Exchange; however, Sony Corporation does not have corporate governance guidelines that cover all the requirements described in the NYSE Corporate Governance Standards, as many of the provisions do not apply to Sony Corporation. Details of the status are posted on the following website:
https://www.sony.net/SonyInfo/csr_report/governance/
|
|
Code of Ethics.
|
Although this provision of the NYSE Corporate Governance Standards does not apply to Sony Corporation, Sony Corporation has adopted a code of conduct to be observed by all its directors, officers and other employees. The code of conduct is available at:
https://www.sony.net/SonyInfo/csr_report/compliance/code.html
The code’s content covers principal items described in the NYSE Corporate Governance Standards.
|
|
Item 16H.
|
Mine Safety Disclosure
|
Item 17.
|
Financial Statements
|
Item 18.
|
Financial Statements
|
Item 19.
|
Exhibits
|
1.1
|
||||
1.2
|
||||
1.3
|
||||
1.4
|
||||
2.1
|
||||
2.2
|
||||
8.1
|
||||
12.1
|
||||
12.2
|
||||
13.1
|
||||
15.1
|
||||
101.INS
|
Inline XBRL Instance Document — the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
|||
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document
|
|||
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
|||
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
|||
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
|||
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
|||
104
|
The cover page for the Company’s Annual Report on Form
20-F
for the year ended March 31, 2020, has been formatted in Inline XBRL
|
SONY CORPORATION
|
||
(Registrant)
|
||
By:
|
/s/ HIROKI TOTOKI
|
|
|
(Signature)
|
|
|
Hiroki Totoki
|
|
|
Executive Deputy President and
Chief Financial Officer
|
|
Page
|
|
||
F-
2
|
||||
F-
6
|
||||
F-
8
|
||||
F-
9
|
||||
F-
10
|
||||
F-
12
|
||||
F-
15
|
||||
F-
16
|
||||
F-
91
|
|
Yen in millions
|
|||||||
|
2019
|
|
2020
|
|
||||
ASSETS
|
|
|
||||||
Current assets:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
1,470,073
|
1,512,357
|
||||||
Marketable securities (including assets pledged that secured parties are permitted to sell or repledge of 15,437 yen and 17,521 yen in 2019 and 2020)
|
1,324,538
|
1,847,772
|
||||||
Notes and accounts receivable, trade and contract assets
|
1,091,242
|
1,028,793
|
||||||
Allowance for doubtful accounts
|
(25,440
|
) |
(25,873
|
) | ||||
Inventories
|
653,278
|
589,969
|
||||||
Other receivables
|
223,620
|
188,106
|
||||||
Prepaid expenses and other current assets
|
509,301
|
594,021
|
||||||
Total current assets
|
5,246,612
|
5,735,145
|
||||||
Film costs
|
409,005
|
427,336
|
||||||
Investments and advances:
|
|
|
||||||
Affiliated companies
|
163,365
|
207,922
|
||||||
Securities investments and other (including assets pledged that secured parties are permitted to sell or repledge of 832,984 yen and 930,882 yen in 2019 and 2020)
|
11,561,286
|
12,526,210
|
||||||
|
11,724,651
|
12,734,132
|
||||||
Property, plant and equipment:
|
|
|
||||||
Land
|
83,992
|
81,482
|
||||||
Buildings
|
664,157
|
659,556
|
||||||
Machinery and equipment
|
1,585,382
|
1,725,720
|
||||||
Construction in progress
|
39,208
|
76,391
|
||||||
|
2,372,739
|
2,543,149
|
||||||
Less — Accumulated depreciation
|
1,595,686
|
1,634,505
|
||||||
|
777,053
|
908,644
|
||||||
Other assets:
|
|
|
||||||
Operating lease
right-of-use
assets
|
—
|
359,510
|
||||||
Finance lease
right-of-use
assets
|
—
|
33,100
|
||||||
Intangibles, net
|
917,966
|
906,310
|
||||||
Goodwill
|
768,552
|
783,888
|
||||||
Deferred insurance acquisition costs
|
595,265
|
600,901
|
||||||
Deferred income taxes
|
202,486
|
210,372
|
||||||
Other
|
339,996
|
340,005
|
||||||
|
2,824,265
|
3,234,086
|
||||||
Total assets
|
20,981,586
|
23,039,343
|
|
Yen in millions
|
|||||||
|
2019
|
|
2020
|
|
||||
LIABILITIES
|
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
|
||
Short-term borrowings
|
618,618
|
810,176
|
||||||
Current portion of long-term debt
|
172,461
|
29,807
|
||||||
Current portion of long-term operating lease liabilities
|
—
|
68,942
|
||||||
Notes and accounts payable, trade
|
492,124
|
380,810
|
||||||
Accounts payable, other and accrued expenses
|
1,693,048
|
1,630,197
|
||||||
Accrued income and other taxes
|
135,226
|
145,996
|
||||||
Deposits from customers in the banking business
|
2,302,314
|
2,440,783
|
||||||
Other
|
666,024
|
733,732
|
||||||
Total current liabilities
|
6,079,815
|
6,240,443
|
||||||
Long-term debt
|
568,372
|
634,966
|
||||||
Long-term operating lease liabilities
|
—
|
314,836
|
||||||
Accrued pension and severance costs
|
384,232
|
324,655
|
||||||
Deferred income taxes
|
531,421
|
549,538
|
||||||
Future insurance policy benefits and other
|
5,642,671
|
6,246,047
|
||||||
Policyholders’ account in the life insurance business
|
3,048,202
|
3,642,271
|
||||||
Other
|
281,382
|
289,285
|
||||||
Total liabilities
|
16,536,095
|
18,242,041
|
||||||
Redeemable noncontrolling interest
|
8,801
|
7,767
|
||||||
Commitments and contingent liabilities
|
|
|
||||||
EQUITY
|
|
|
||||||
Sony Corporation’s stockholders’ equity:
|
|
|
||||||
Common stock, no par value —
|
|
|
||||||
2019 — Shares authorized: 3,600,000,000; shares issued: 1,271,230,341
|
874,291
|
|
||||||
2020 — Shares authorized: 3,600,000,000; shares issued: 1,261,058,781
|
|
880,214
|
||||||
Additional
paid-in
capital
|
1,266,874
|
1,289,719
|
||||||
Retained earnings
|
2,320,586
|
2,768,856
|
||||||
Accumulated other comprehensive income —
|
|
|
||||||
Unrealized gains on securities, net
|
135,035
|
161,191
|
||||||
Unrealized gains (losses) on derivative instruments, net
|
(19
|
) |
1,248
|
|||||
Pension liability adjustment
|
(310,457
|
) |
(235,520
|
) | ||||
Foreign currency translation adjustments
|
(435,229
|
) |
(509,872
|
) | ||||
Debt valuation adjustments
|
—
|
1,973
|
||||||
|
(610,670
|
) |
(580,980
|
) | ||||
Treasury stock, at cost
|
|
|
||||||
Common stock
|
|
|
||||||
2019 — 20,483,474 shares
|
(104,704
|
) |
|
|||||
2020 — 40,898,841 shares
|
|
(232,503
|
) | |||||
|
3,746,377
|
4,125,306
|
||||||
Noncontrolling interests
|
690,313
|
664,229
|
||||||
Total equity
|
4,436,690
|
4,789,535
|
||||||
Total liabilities and equity
|
20,981,586
|
23,039,343
|
|
Yen in millions
|
|||||||||||
|
2018
|
|
2019
|
|
2020
|
|
||||||
Sales and operating revenue:
|
|
|
|
|
|
|
|
|
|
|||
Net sales
|
7,231,613
|
7,306,235
|
6,856,090
|
|||||||||
Financial services revenue
|
1,221,235
|
1,274,708
|
1,299,847
|
|||||||||
Other operating revenue
|
91,134
|
84,744
|
103,948
|
|||||||||
|
8,543,982
|
8,665,687
|
8,259,885
|
|||||||||
Costs and expenses:
|
|
|
|
|||||||||
Cost of sales
|
5,188,259
|
5,150,750
|
4,753,174
|
|||||||||
Selling, general and administrative
|
1,583,197
|
1,576,825
|
1,502,625
|
|||||||||
Financial services expenses
|
1,042,163
|
1,112,446
|
1,171,875
|
|||||||||
Other operating (income) expense, net
|
4,072
|
(71,568
|
) |
(3,611
|
) | |||||||
|
7,817,691
|
7,768,453
|
7,424,063
|
|||||||||
Equity in net income (loss) of affiliated companies
|
8,569
|
(2,999
|
) |
9,637
|
||||||||
Operating income
|
734,860
|
894,235
|
845,459
|
|||||||||
Other income:
|
|
|
|
|||||||||
Interest and dividends
|
19,784
|
21,618
|
19,278
|
|||||||||
Gain on sale of securities investments, net
|
1,517
|
—
|
—
|
|||||||||
Gain on equity securities, net
|
—
|
118,677
|
—
|
|||||||||
Other
|
2,427
|
4,440
|
2,671
|
|||||||||
|
23,728
|
144,735
|
21,949
|
|||||||||
Other expenses:
|
|
|
|
|
|
|
|
|
|
|||
Interest
|
13,566
|
12,467
|
11,090
|
|||||||||
Loss on devaluation of securities investments
|
4,955
|
—
|
—
|
|||||||||
Loss on equity securities, net
|
—
|
—
|
20,180
|
|||||||||
Foreign exchange loss, net
|
30,634
|
11,279
|
26,789
|
|||||||||
Loss on pension plan amendment
|
—
|
—
|
6,358
|
|||||||||
Other
|
10,384
|
3,576
|
3,541
|
|||||||||
|
59,539
|
27,322
|
67,958
|
|||||||||
Income before income taxes
|
699,049
|
1,011,648
|
799,450
|
|||||||||
Income taxes:
|
|
|
|
|||||||||
Current
|
127,685
|
166,748
|
172,391
|
|||||||||
Deferred
|
24,085
|
(121,650
|
) |
4,799
|
||||||||
|
151,770
|
45,098
|
177,190
|
|||||||||
Net income
|
547,279
|
966,550
|
622,260
|
|||||||||
Less — Net income attributable to noncontrolling interests
|
56,485
|
50,279
|
40,069
|
|||||||||
Net income attributable to Sony Corporation’s stockholders
|
490,794
|
916,271
|
582,191
|
|
Yen
|
|||||||||||
|
2018
|
|
2019
|
|
2020
|
|
||||||
Per share data:
|
|
|
|
|
|
|
|
|
|
|||
Common stock
|
|
|
|
|||||||||
Net income attributable to Sony Corporation’s stockholders
|
|
|
|
|||||||||
— Basic
|
388.32
|
723.41
|
471.64
|
|||||||||
— Diluted
|
379.75
|
707.74
|
461.23
|
|
Yen in millions
|
|||||||||||
|
2018
|
|
2019
|
|
2020
|
|
||||||
Net income
|
547,279
|
966,550
|
622,260
|
|||||||||
Other comprehensive income, net of tax —
|
|
|
|
|||||||||
Unrealized gains on securities
|
1,070
|
33,285
|
40,390
|
|||||||||
Unrealized gains (losses) on derivative instruments
|
(1,184
|
) |
1,223
|
1,267
|
||||||||
Pension liability adjustment
|
12,390
|
(13,960
|
) |
74,971
|
||||||||
Foreign currency translation adjustments
|
(6,335
|
) |
8,444
|
(75,888
|
) | |||||||
Debt valuation adjustments
|
—
|
—
|
3,032
|
|||||||||
Total comprehensive income
|
553,220
|
995,542
|
666,032
|
|||||||||
Less — Comprehensive income attributable to noncontrolling interests
|
60,403
|
57,669
|
54,151
|
|||||||||
Comprehensive income attributable to Sony Corporation’s stockholders
|
492,817
|
937,873
|
611,881
|
|
Yen in millions
|
|||||||||||
|
2018
|
|
2019
|
|
2020
|
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|||
Net income
|
547,279
|
966,550
|
622,260
|
|||||||||
Adjustments to reconcile net income to net cash provided by
operating activities — |
|
|
|
|||||||||
Depreciation and amortization, including amortization of deferred
insurance acquisition costs and contract costs |
361,444
|
374,026
|
416,642
|
|||||||||
Amortization of film costs
|
359,274
|
348,493
|
329,809
|
|||||||||
Accrual for pension and severance costs, less payments
|
4,113
|
(33,631
|
) |
8,948
|
||||||||
Other operating (income) expense, net
|
4,072
|
(71,568
|
) |
(3,611
|
) | |||||||
(Gain) loss on securities investments, net (other than financial services business)
|
3,438
|
(118,630
|
) |
20,177
|
||||||||
(Gain) loss on marketable securities and securities investments held in the financial services business, net
|
(47,119
|
) |
(66,383
|
) |
93,088
|
|||||||
Deferred income taxes
|
24,085
|
(121,650
|
) |
4,799
|
||||||||
Equity in net (income) loss of affiliated companies, net of dividends
|
(2,956
|
) |
7,947
|
(5,114
|
) | |||||||
Changes in assets and liabilities:
|
|
|
|
|||||||||
(Increase) decrease in notes and accounts receivable, trade and contract assets
|
(80,004
|
) |
1,144
|
62,654
|
||||||||
(Increase) decrease in inventories
|
(51,508
|
) |
30,455
|
40,315
|
||||||||
Increase in film costs
|
(362,496
|
) |
(410,994
|
) |
(361,194
|
) | ||||||
Increase (decrease) in notes and accounts payable, trade
|
(87,939
|
) |
18,534
|
(91,435
|
) | |||||||
Increase (decrease) in accrued income and other taxes
|
29,181
|
(20,039
|
) |
(40,144
|
) | |||||||
Increase in future insurance policy benefits and other
|
495,419
|
544,179
|
520,683
|
|||||||||
Increase in deferred insurance acquisition costs
|
(86,779
|
) |
(88,807
|
) |
(99,433
|
) | ||||||
Increase in marketable securities held in the life insurance business
|
(89,797
|
) |
(64,034
|
) |
(124,270
|
) | ||||||
(Increase) decrease in other current assets
|
3,776
|
16,576
|
(37,286
|
) | ||||||||
Increase (decrease) in other current liabilities
|
151,805
|
56,723
|
(27,083
|
) | ||||||||
Other
|
78,683
|
(110,153
|
) |
19,940
|
||||||||
Net cash provided by operating activities
|
1,253,971
|
1,258,738
|
1,349,745
|
|||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|||
Payments for purchases of fixed assets
|
(262,989
|
) |
(312,644
|
) |
(439,761
|
) | ||||||
Proceeds from sales of fixed assets
|
60,599
|
17,585
|
18,758
|
|||||||||
Payments for investments and advances by financial services business
|
(963,210
|
) |
(1,078,250
|
) |
(1,319,062
|
) | ||||||
Payments for investments and advances (other than financial services business)
|
(13,801
|
) |
(53,525
|
) |
(48,853
|
) | ||||||
Proceeds from sales or return of investments and collections of advances by financial services business
|
317,159
|
309,498
|
343,740
|
|||||||||
Proceeds from sales or return of investments and collections of advances (other than financial services business)
|
6,596
|
2,442
|
14,456
|
|||||||||
Payment for EMI Music Publishing acquisition, net of cash acquired
|
—
|
(244,197
|
) |
—
|
||||||||
Proceeds from sales of businesses
|
44,624
|
—
|
12,816
|
|||||||||
Proceeds related to sales of Spotify Technology S.A. Shares
|
—
|
82,467
|
—
|
|||||||||
Proceeds from sales of Olympus Corporation Shares
|
—
|
—
|
80,357
|
|||||||||
Other
|
(12,046
|
) |
(30,821
|
) |
(14,729
|
) | ||||||
Net cash used in investing activities
|
(823,068
|
) |
(1,307,445
|
) |
(1,352,278
|
) |
|
Yen in millions
|
|||||||||||
|
2018
|
|
2019
|
|
2020
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|||
Proceeds from issuance of long-term debt
|
125,092
|
94,351
|
118,447
|
|||||||||
Payments of long-term debt
|
(44,561
|
) |
(382,671
|
) |
(198,055
|
) | ||||||
Increase in short-term borrowings, net
|
35,145
|
123,979
|
193,332
|
|||||||||
Increase in deposits from customers in the financial services business, net
|
169,479
|
246,945
|
258,720
|
|||||||||
Dividends paid
|
(28,490
|
) |
(38,067
|
) |
(49,574
|
) | ||||||
Payments for purchase of treasury stock
|
(198
|
) |
(100,177
|
) |
(200,211
|
) | ||||||
Payment for purchase of noncontrolling interest in Nile Acquisition LLC
|
—
|
(32,041
|
) |
—
|
||||||||
Payment for purchase of noncontrolling interest in Game Show Network, LLC
|
—
|
—
|
(39,894
|
) | ||||||||
Other
|
(10,011
|
) |
(35,203
|
) |
(17,107
|
) | ||||||
Net cash provided by (used in) financing activities
|
246,456
|
(122,884
|
) |
65,658
|
||||||||
Effect of exchange rate changes on cash and cash equivalents, including restricted
|
(53,044
|
) |
52,465
|
(21,643
|
) | |||||||
Net increase (decrease) in cash and cash equivalents, including restricted
|
624,315
|
(119,126
|
) |
41,482
|
||||||||
Cash and cash equivalents, including restricted, at beginning of the fiscal year
|
968,624
|
1,592,939
|
1,473,813
|
|||||||||
Cash and cash equivalents, including restricted, at end of the fiscal year
|
1,592,939
|
1,473,813
|
1,515,295
|
|||||||||
Less — Restricted cash and cash equivalents, included in other current assets and other assets
|
6,610
|
3,740
|
2,938
|
|||||||||
Cash and cash equivalents at end of the fiscal year
|
1,586,329
|
1,470,073
|
1,512,357
|
|||||||||
Supplemental data:
|
|
|
|
|
|
|
|
|
|
|||
Cash paid during the fiscal year for —
|
|
|
|
|||||||||
Income taxes
|
101,092
|
210,499
|
216,922
|
|||||||||
Interest
|
12,169
|
10,882
|
10,000
|
|||||||||
Non-cash
investing and financing activities —
|
|
|
|
|||||||||
Obtaining assets by entering into finance leases
|
21,762
|
32,541
|
6,478
|
|
Yen in millions
|
|||||||||||||||||||||||||||||||
|
Common
stock |
|
Additional
paid-in
capital |
|
Retained
earnings |
|
Accumulated
other comprehensive income |
|
Treasury
stock, at cost |
|
Sony
Corporation’s stockholders’ equity |
|
Noncontrolling
interests |
|
Total equity
|
|
||||||||||||||||
Balance at March 31, 2017
|
860,645
|
1,275,337
|
984,368
|
(618,769
|
) |
(4,335
|
) |
2,497,246
|
638,176
|
3,135,422
|
||||||||||||||||||||||
Issuance of new shares
|
488
|
488
|
|
|
|
976
|
|
976
|
||||||||||||||||||||||||
Exercise of stock acquisition rights
|
4,533
|
4,532
|
|
|
|
9,065
|
|
9,065
|
||||||||||||||||||||||||
Conversion of convertible bonds
|
12
|
12
|
|
|
|
24
|
|
24
|
||||||||||||||||||||||||
Stock-based compensation
|
|
3,160
|
|
|
|
3,160
|
|
3,160
|
||||||||||||||||||||||||
Comprehensive income:
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Net income
|
|
|
490,794
|
|
|
490,794
|
56,485
|
547,279
|
||||||||||||||||||||||||
Other comprehensive income, net of tax —
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Unrealized gains (losses) on securities
|
|
|
|
(444
|
) |
|
(444
|
) |
1,514
|
1,070
|
||||||||||||||||||||||
Unrealized losses on derivative
instruments
|
|
|
|
(1,184
|
) |
|
(1,184
|
) |
|
(1,184
|
) | |||||||||||||||||||||
Pension liability adjustment
|
|
|
|
12,292
|
|
12,292
|
98
|
12,390
|
||||||||||||||||||||||||
Foreign currency translation adjustments
|
|
|
|
(8,641
|
) |
|
(8,641
|
) |
2,306
|
(6,335
|
) | |||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Total comprehensive income
|
|
|
|
|
|
492,817
|
60,403
|
553,220
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Stock issue costs, net of tax
|
|
(879
|
) |
|
|
|
(879
|
) |
|
(879
|
) | |||||||||||||||||||||
Dividends declared (27.50 yen per share)
|
|
|
(34,775
|
) |
|
|
(34,775
|
) |
(14,361
|
) |
(49,136
|
) | ||||||||||||||||||||
Purchase of treasury stock
|
|
|
|
|
(199
|
) |
(199
|
) |
|
(199
|
) | |||||||||||||||||||||
Reissuance of treasury stock
|
|
0
|
|
|
4
|
4
|
|
4
|
||||||||||||||||||||||||
Transactions with noncontrolling interests
shareholders and other
|
|
(73
|
) |
|
|
|
(73
|
) |
(4,427
|
) |
(4,500
|
) | ||||||||||||||||||||
Balance at March 31, 2018
|
865,678
|
1,282,577
|
1,440,387
|
(616,746
|
) |
(4,530
|
) |
2,967,366
|
679,791
|
3,647,157
|
||||||||||||||||||||||
|
Yen in millions
|
|||||||||||||||||||||||||||||||
|
Common
stock |
|
Additional
paid-in
capital |
|
Retained
earnings |
|
Accumulated
other comprehensive income |
|
Treasury
stock, at cost |
|
Sony
Corporation’s stockholders’ equity |
|
Noncontrolling
interests |
|
Total equity
|
|
||||||||||||||||
Balance at March 31, 2018
|
865,678
|
1,282,577
|
1,440,387
|
(616,746
|
) |
(4,530
|
) |
2,967,366
|
679,791
|
3,647,157
|
||||||||||||||||||||||
Cumulative effect of newly adopted ASUs
|
|
|
7,976
|
(15,526
|
) |
|
(7,550
|
) |
5,432
|
(2,118
|
) | |||||||||||||||||||||
Issuance of new shares
|
431
|
431
|
|
|
|
862
|
|
862
|
||||||||||||||||||||||||
Exercise of stock acquisition rights
|
8,174
|
8,174
|
|
|
|
16,348
|
|
16,348
|
||||||||||||||||||||||||
Conversion of convertible bonds
|
8
|
8
|
|
|
|
16
|
|
16
|
||||||||||||||||||||||||
Stock-based compensation
|
|
1,159
|
|
|
|
1,159
|
|
1,159
|
||||||||||||||||||||||||
Comprehensive income:
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Net income
|
|
|
916,271
|
|
|
916,271
|
50,279
|
966,550
|
||||||||||||||||||||||||
Other comprehensive income, net of tax —
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Unrealized gains on securities
|
|
|
|
24,370
|
|
24,370
|
8,915
|
33,285
|
||||||||||||||||||||||||
Unrealized gains on derivative
instruments
|
|
|
|
1,223
|
|
1,223
|
|
1,223
|
||||||||||||||||||||||||
Pension liability adjustment
|
|
|
|
(14,013
|
) |
|
(14,013
|
) |
53
|
(13,960
|
) | |||||||||||||||||||||
Foreign currency translation adjustments
|
|
|
|
10,022
|
|
10,022
|
(1,578
|
) |
8,444
|
|||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Total comprehensive income
|
|
|
|
|
|
937,873
|
57,669
|
995,542
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Stock issue costs, net of tax
|
|
(147
|
) |
|
|
|
(147
|
) |
|
(147
|
) | |||||||||||||||||||||
Dividends declared (35.00 yen per share)
|
|
|
(44,048
|
) |
|
|
(44,048
|
) |
(28,961
|
) |
(73,009
|
) | ||||||||||||||||||||
Purchase of treasury stock
|
|
|
|
|
(100,177
|
) |
(100,177
|
) |
|
(100,177
|
) | |||||||||||||||||||||
Reissuance of treasury stock
|
|
1
|
|
|
3
|
4
|
|
4
|
||||||||||||||||||||||||
Transactions with noncontrolling interests
shareholders and other
|
|
(25,329
|
) |
|
|
|
(25,329
|
) |
(23,618
|
) |
(48,947
|
) | ||||||||||||||||||||
Balance at March 31, 2019
|
874,291
|
1,266,874
|
2,320,586
|
(610,670
|
) |
(104,704
|
) |
3,746,377
|
690,313
|
4,436,690
|
||||||||||||||||||||||
|
Yen in millions
|
|||||||||||||||||||||||||||||||
|
Common
stock |
|
Additional
paid-in
capital |
|
Retained
earnings |
|
Accumulated
other comprehensive income |
|
Treasury
stock, at cost |
|
Sony
Corporation’s stockholders’ equity |
|
Noncontrolling
interests |
|
Total equity
|
|
||||||||||||||||
Balance at March 31, 2019
|
874,291
|
1,266,874
|
2,320,586
|
(610,670
|
) |
(104,704
|
) |
3,746,377
|
690,313
|
4,436,690
|
||||||||||||||||||||||
Cumulative effect of ASU
2016-02
|
|
|
(7,472
|
) |
|
|
(7,472
|
) |
|
(7,472
|
) | |||||||||||||||||||||
Issuance of new shares
|
529
|
529
|
|
|
|
1,058
|
|
1,058
|
||||||||||||||||||||||||
Exercise of stock acquisition rights
|
5,179
|
5,180
|
|
|
|
10,359
|
|
10,359
|
||||||||||||||||||||||||
Conversion of convertible bonds
|
215
|
215
|
|
|
|
430
|
|
430
|
||||||||||||||||||||||||
Stock-based compensation
|
|
1,980
|
|
|
|
1,980
|
|
1,980
|
||||||||||||||||||||||||
Comprehensive income:
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Net income
|
|
|
582,191
|
|
|
582,191
|
40,069
|
622,260
|
||||||||||||||||||||||||
Other comprehensive income, net of tax —
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Unrealized gains on securities
|
|
|
|
26,156
|
|
26,156
|
14,234
|
40,390
|
||||||||||||||||||||||||
Unrealized gains on derivative
instruments
|
|
|
|
1,267
|
|
1,267
|
|
1,267
|
||||||||||||||||||||||||
Pension liability adjustment
|
|
|
|
74,937
|
|
74,937
|
34
|
74,971
|
||||||||||||||||||||||||
Foreign currency translation adjustments
|
|
|
|
(74,643
|
) |
|
(74,643
|
) |
(1,245
|
) |
(75,888
|
) | ||||||||||||||||||||
Debt valuation adjustments
|
|
|
|
1,973
|
|
1,973
|
1,059
|
3,032
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Total comprehensive income
|
|
|
|
|
|
611,881
|
54,151
|
666,032
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Stock issue costs, net of tax
|
|
(80
|
) |
|
|
|
(80
|
) |
|
(80
|
) | |||||||||||||||||||||
Dividends declared (45.00 yen per share)
|
|
|
(55,111
|
) |
|
|
(55,111
|
) |
(25,885
|
) |
(80,996
|
) | ||||||||||||||||||||
Purchase of treasury stock
|
|
|
|
|
(200,211
|
) |
(200,211
|
) |
|
(200,211
|
) | |||||||||||||||||||||
Reissuance of treasury stock
|
|
0
|
|
|
2
|
2
|
|
2
|
||||||||||||||||||||||||
Cancellation of treasury stock
|
|
(1,072
|
) |
(71,338
|
) |
|
72,410
|
—
|
|
—
|
||||||||||||||||||||||
Transactions with noncontrolling interests
shareholders and other
|
|
16,093
|
|
|
|
16,093
|
(54,350
|
) |
(38,257
|
) | ||||||||||||||||||||||
Balance at March 31, 2020
|
880,214
|
1,289,719
|
2,768,856
|
(580,980
|
) |
(232,503
|
) |
4,125,306
|
664,229
|
4,789,535
|
||||||||||||||||||||||
1
.
|
Nature of operations
|
2
.
|
Summary of significant accounting policies
|
(1)
|
Significant accounting policies
|
Level 1
|
—
|
Inputs are unadjusted quoted prices for identical assets and liabilities in active markets.
|
||
Level 2
|
—
|
Inputs are based on observable inputs other than level 1 prices, such as quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations, in which all significant inputs are observable in active markets.
|
||
Level 3
|
—
|
One or more significant inputs are unobservable.
|
(2)
|
Recently adopted accounting pronouncements
|
(3)
|
Recent accounting pronouncements not yet adopted
|
(4)
|
Reclassifications
|
3.
|
Inventories
|
|
Yen in millions
|
|||||||
|
March 31
|
|||||||
|
2019
|
|
2020
|
|
||||
Finished products
|
407,295
|
345,231
|
||||||
Work in process
|
154,178
|
149,969
|
||||||
Raw materials, purchased components and supplies
|
91,805
|
94,769
|
||||||
|
|
|
|
|||||
Inventories
|
653,278
|
589,969
|
||||||
4.
|
Film costs
|
|
Yen in millions
|
|||||||
|
March 31
|
|||||||
|
2019
|
|
2020
|
|
||||
Motion picture productions:
|
|
|
||||||
Released
|
87,158
|
99,482
|
||||||
Completed and not released
|
3,189
|
18,776
|
||||||
In production and development
|
130,736
|
67,199
|
||||||
Television productions:
|
|
|
||||||
Released
|
144,316
|
186,344
|
||||||
In production and development
|
9,147
|
25,093
|
||||||
Broadcasting rights
|
70,401
|
61,959
|
||||||
Less: current portion included in inventories
|
(35,942
|
) |
(31,517
|
) | ||||
|
|
|
|
|||||
Film costs
|
409,005
|
427,336
|
||||||
5.
|
Investments in affiliated companies
|
|
Yen in millions
|
|||||||
|
March 31
|
|||||||
|
2019
|
|
2020
|
|
||||
Current assets
|
355,320
|
389,195
|
||||||
Noncurrent assets
|
608,626
|
164,852
|
||||||
Current liabilities
|
188,905
|
194,219
|
||||||
Noncurrent liabilities and noncontrolling interests
|
584,714
|
60,469
|
||||||
Percentage of ownership in equity investees
|
20%-50
|
% |
20%-50
|
% |
|
Yen in millions
|
|||||||||||
|
Fiscal year ended March 31
|
|||||||||||
|
2018
|
|
2019
|
|
2020
|
|
||||||
Net revenues
|
468,933
|
390,457
|
387,678
|
|||||||||
Operating income
|
56,729
|
53,920
|
58,431
|
|||||||||
Net income attributable to controlling interests
|
27,301
|
5,539
|
34,916
|
|||||||||
Percentage of ownership in equity investees
|
20%-50
|
% |
20%-50
|
% |
20%-50
|
% |
|
Yen in millions
|
|||||||
|
March 31
|
|||||||
|
2019
|
|
2020
|
|
||||
Accounts receivable, trade
|
12,404
|
12,030
|
||||||
Other receivables
|
134
|
1,589
|
||||||
Other current assets
|
33
|
9,757
|
||||||
Accounts payable, trade
|
1,087
|
1,497
|
||||||
Short-term borrowings
|
29,744
|
31,557
|
||||||
Finance lease liabilities and other*
|
20,265
|
34,564
|
||||||
Operating lease liabilities
|
—
|
2,393
|
* | Finance lease liabilities and other were represented as Capital lease obligations as of the fiscal year ended March 31, 2019. |
|
Yen in millions
|
|||||||||||
|
Fiscal year ended March 31
|
|||||||||||
|
2018
|
|
2019
|
|
2020
|
|
||||||
Sales
|
45,415
|
41,437
|
35,951
|
|||||||||
Purchases
|
3,180
|
5,584
|
3,479
|
6.
|
Transfer of financial assets
|
7. |
Marketable securities and securities investments
|
|
|
Yen in millions
|
|
|||||||||||||||||||||||||||||
|
|
March 31, 2019
|
|
|
March 31, 2020
|
|
||||||||||||||||||||||||||
|
|
Cost
|
|
|
Gross
unrealized gains |
|
|
Gross
unrealized losses |
|
|
Fair value
|
|
|
Cost
|
|
|
Gross
unrealized gains |
|
|
Gross
unrealized losses |
|
|
Fair value
|
|
||||||||
Debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Japanese national government bonds
|
|
|
1,422,620
|
|
|
|
220,989
|
|
|
|
(20
|
)
|
|
|
1,643,589
|
|
|
|
1,552,036
|
|
|
|
210,459
|
|
|
|
(566
|
)
|
|
|
1,761,929
|
|
Japanese local government bonds
|
|
|
67,461
|
|
|
|
70
|
|
|
|
(34
|
)
|
|
|
67,497
|
|
|
|
69,132
|
|
|
|
73
|
|
|
|
(33
|
)
|
|
|
69,172
|
|
Japanese corporate bonds
|
|
|
202,433
|
|
|
|
17,178
|
|
|
|
(223
|
)
|
|
|
219,388
|
|
|
|
202,164
|
|
|
|
19,112
|
|
|
|
(567
|
)
|
|
|
220,709
|
|
Foreign government bonds
|
|
|
153,429
|
|
|
|
8,669
|
|
|
|
(603
|
)
|
|
|
161,495
|
|
|
|
198,777
|
|
|
|
81,014
|
|
|
|
(14
|
)
|
|
|
279,777
|
|
Foreign corporate bonds
|
|
|
360,299
|
|
|
|
944
|
|
|
|
(376
|
)
|
|
|
360,867
|
|
|
|
361,422
|
|
|
|
507
|
|
|
|
(2,179
|
)
|
|
|
359,750
|
|
Securitized products
|
|
|
190,111
|
|
|
|
1
|
|
|
|
—
|
|
|
|
190,112
|
|
|
|
205,223
|
|
|
|
0
|
|
|
|
—
|
|
|
|
205,223
|
|
Other
|
|
|
2,286
|
|
|
|
2,402
|
|
|
|
—
|
|
|
|
4,688
|
|
|
|
14,398
|
|
|
|
1,867
|
|
|
|
(12
|
)
|
|
|
16,253
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,398,639
|
|
|
|
250,253
|
|
|
|
(1,256
|
)
|
|
|
2,647,636
|
|
|
|
2,603,152
|
|
|
|
313,032
|
|
|
|
(3,371
|
)
|
|
|
2,912,813
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Held-to-maturity
securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Japanese national government bonds
|
|
|
6,042,635
|
|
|
|
2,016,786
|
|
|
|
—
|
|
|
|
8,059,421
|
|
|
|
6,204,505
|
|
|
|
2,098,885
|
|
|
|
(1,397
|
)
|
|
|
8,301,993
|
|
Japanese local government bonds
|
|
|
3,518
|
|
|
|
388
|
|
|
|
—
|
|
|
|
3,906
|
|
|
|
2,504
|
|
|
|
331
|
|
|
|
—
|
|
|
|
2,835
|
|
Japanese corporate bonds
|
|
|
409,329
|
|
|
|
44,348
|
|
|
|
(5,845
|
)
|
|
|
447,832
|
|
|
|
482,050
|
|
|
|
61,176
|
|
|
|
(4,754
|
)
|
|
|
538,472
|
|
Foreign government bonds
|
|
|
386,392
|
|
|
|
18,609
|
|
|
|
(13,742
|
)
|
|
|
391,259
|
|
|
|
723,937
|
|
|
|
302,297
|
|
|
|
—
|
|
|
|
1,026,234
|
|
Foreign corporate bonds
|
|
|
198
|
|
|
|
11
|
|
|
|
—
|
|
|
|
209
|
|
|
|
98
|
|
|
|
7
|
|
|
|
—
|
|
|
|
105
|
|
Securitized products
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5,418
|
|
|
|
—
|
|
|
|
(421
|
)
|
|
|
4,997
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,842,072
|
|
|
|
2,080,142
|
|
|
|
(19,587
|
)
|
|
|
8,902,627
|
|
|
|
7,418,512
|
|
|
|
2,462,696
|
|
|
|
(6,572
|
)
|
|
|
9,874,636
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
9,240,711
|
|
|
|
2,330,395
|
|
|
|
(20,843
|
)
|
|
|
11,550,263
|
|
|
|
10,021,664
|
|
|
|
2,775,728
|
|
|
|
(9,943
|
)
|
|
|
12,787,449
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yen in millions
|
|||||||||||||||
|
March 31, 2020
|
|||||||||||||||
|
Available-for-sale
securities
|
Held-to-maturity
securities
|
||||||||||||||
|
Cost
|
|
Fair value
|
|
Cost
|
|
Fair value
|
|
||||||||
Due in one year or less
|
145,867
|
146,084
|
6,075
|
6,109
|
||||||||||||
Due after one year through five years
|
432,281
|
435,443
|
199,509
|
217,983
|
||||||||||||
Due after five years through ten years
|
561,098
|
637,363
|
246,072
|
283,086
|
||||||||||||
Due after ten years
|
1,463,906
|
1,693,923
|
6,966,856
|
9,367,458
|
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
2,603,152
|
2,912,813
|
7,418,512
|
9,874,636
|
||||||||||||
|
Yen in millions
|
|||||||||||||||||||||||
|
March 31, 2019
|
|||||||||||||||||||||||
|
Less than 12 months
|
12 months or more
|
Total
|
|||||||||||||||||||||
|
Fair
value |
|
Unrealized
losses |
|
Fair
value |
|
Unrealized
losses |
|
Fair
value |
|
Unrealized
losses |
|
||||||||||||
Debt securities:
|
|
|
|
|
|
|
||||||||||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
||||||||||||||||||
Japanese national government bonds
|
—
|
—
|
4,063
|
(20
|
) |
4,063
|
(20
|
) | ||||||||||||||||
Japanese local government bonds
|
27,404
|
(29
|
) |
4,872
|
(5
|
) |
32,276
|
(34
|
) | |||||||||||||||
Japanese corporate bonds
|
25,725
|
(21
|
) |
19,925
|
(202
|
) |
45,650
|
(223
|
) | |||||||||||||||
Foreign government bonds
|
—
|
—
|
15,878
|
(603
|
) |
15,878
|
(603
|
) | ||||||||||||||||
Foreign corporate bonds
|
50,281
|
(117
|
) |
15,455
|
(259
|
) |
65,736
|
(376
|
) | |||||||||||||||
Securitized products
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Other
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
103,410
|
(167
|
) |
60,193
|
(1,089
|
) |
163,603
|
(1,256
|
) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Held-to-maturity
securities:
|
|
|
|
|
|
|
||||||||||||||||||
Japanese national government bonds
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Japanese local government bonds
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Japanese corporate bonds
|
—
|
—
|
97,984
|
(5,845
|
) |
97,984
|
(5,845
|
) | ||||||||||||||||
Foreign government bonds
|
—
|
—
|
151,229
|
(13,742
|
) |
151,229
|
(13,742
|
) | ||||||||||||||||
Foreign corporate bonds
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
—
|
—
|
249,213
|
(19,587
|
) |
249,213
|
(19,587
|
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total
|
103,410
|
(167
|
) |
309,406
|
(20,676
|
) |
412,816
|
(20,843
|
) | |||||||||||||||
|
Yen in millions
|
|||||||||||||||||||||||
|
March 31, 2020
|
|||||||||||||||||||||||
|
Less than 12 months
|
12 months or more
|
Total
|
|||||||||||||||||||||
|
Fair
value |
|
Unrealized
losses |
|
Fair
value |
|
Unrealized
losses |
|
Fair
value |
|
Unrealized
losses |
|||||||||||||
Debt securities:
|
|
|
|
|
|
|
||||||||||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
||||||||||||||||||
Japanese national government bonds
|
51,746
|
(539
|
) |
2,032
|
(27
|
) |
53,778
|
(566
|
) | |||||||||||||||
Japanese local government bonds
|
25,010
|
(10
|
) |
16,340
|
(23
|
) |
41,350
|
(33
|
) | |||||||||||||||
Japanese corporate bonds
|
62,118
|
(548
|
) |
10,694
|
(19
|
) |
72,812
|
(567
|
) | |||||||||||||||
Foreign government bonds
|
—
|
—
|
1,537
|
(14
|
) |
1,537
|
(14
|
) | ||||||||||||||||
Foreign corporate bonds
|
86,220
|
(2,133
|
) |
18,896
|
(46
|
) |
105,116
|
(2,179
|
) | |||||||||||||||
Securitized products
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Other
|
12,055
|
|
|
|
(12
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
12,055
|
(12
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
237,149
|
(3,242
|
) |
49,499
|
(129
|
) |
286,648
|
(3,371
|
) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Held-to-maturity
securities:
|
|
|
|
|
|
|
||||||||||||||||||
Japanese national government bonds
|
134,320
|
(1,397
|
) |
—
|
—
|
134,320
|
(1,397
|
) | ||||||||||||||||
Japanese local government bonds
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Japanese corporate bonds
|
98,172
|
(4,285
|
) |
3,727
|
(469
|
) |
101,899
|
(4,754
|
) | |||||||||||||||
Foreign government bonds
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Foreign corporate bonds
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Securitized products
|
5,418
|
(421
|
) |
—
|
—
|
5,418
|
(421
|
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
237,910
|
(6,103
|
) |
3,727
|
(469
|
) |
241,637
|
(6,572
|
) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total
|
475,059
|
(9,345
|
) |
53,226
|
(598
|
) |
528,285
|
(9,943
|
) | |||||||||||||||
8.
|
Leases
|
(1)
|
Lease cost
|
|
Yen in millions
|
|
||
|
Fiscal year ended
March 31 |
|
||
|
2020
|
|
||
Finance Lease cost
|
|
|||
Amortization of
right-of-use
assets
|
10,077
|
|||
Interest on lease liabilities
|
1,266
|
|||
|
|
|||
Total finance lease cost
|
11,343
|
|||
Operating lease cost
|
76,863
|
|||
Short-term lease cost
|
20,620
|
|||
Variable lease cost
|
141
|
|||
Sublease income
|
(3,860
|
) | ||
|
|
|||
Total lease cost
|
105,107
|
|||
(2)
|
Supplemental
consolidated
balance sheet information related to leases
|
|
Yen in millions
|
|
||
|
March 31
|
|
||
|
2020
|
|
||
Finance leases
|
|
|
|
|
Current portion of long-term debt
|
9,240
|
|||
Long-term debt
|
29,843
|
|||
|
|
|||
Total finance lease liabilities
|
39,083
|
|||
Weighted average remaining lease term
|
|
|
|
|
Operating leases
|
9.91 years
|
|||
Finance leases
|
8.61 years
|
|||
Weighted average discount rate
|
|
|
|
|
Operating leases
|
3.147
|
% | ||
Finance leases
|
2.338
|
% |
(3)
|
Rental payments and sublease rentals under operating leases
|
Fiscal year ending March 31
|
Yen in millions
|
|
||
2020
|
58,901
|
|||
2021
|
48,823
|
|||
2022
|
34,726
|
|||
2023
|
25,355
|
|||
2024
|
22,152
|
|||
Later fiscal years
|
78,507
|
|||
|
|
|||
Total minimum future rentals
|
268,464
|
|||
(4)
|
Maturities of lease liabilities
|
|
Yen in millions
|
|||||||
Fiscal year ending March 31
|
Operating leases
|
|
Finance leases
|
|
||||
2021
|
76,469
|
10,213
|
||||||
2022
|
69,606
|
7,323
|
||||||
2023
|
55,648
|
5,990
|
||||||
2024
|
40,303
|
4,689
|
||||||
2025
|
30,664
|
3,163
|
||||||
Later fiscal years
|
152,275
|
23,088
|
||||||
|
|
|
|
|||||
Total lease payments
|
424,965
|
54,466
|
||||||
Less imputed interest
|
41,187
|
15,383
|
||||||
|
|
|
|
|||||
Total
|
383,778
|
39,083
|
||||||
(5)
|
Other information
|
|
Yen in millions
|
|
||
|
Fiscal year ended
March 31 |
|
||
|
2020
|
|
||
Cash paid for amounts included in the measurement of lease liabilities
|
|
|||
Payments for operating leases, included in cash flows from operating activities
|
71,612
|
|||
Payments for finance leases, included in cash flows from financing activities
|
33,088
|
|||
Right-of-use
assets obtained in exchange for new operating lease liabilities
|
124,380
|
9.
|
Goodwill and other intangible assets
|
|
Intangible assets
acquired during the
fiscal year
|
|
Weighted-average
amortization period |
|
||||
|
Yen in millions
|
|
Years
|
|
||||
Patent rights,
know-how
and license agreements
|
7,848
|
8
|
||||||
Software to be sold, leased or otherwise marketed
|
16,609
|
3
|
||||||
Internal-use
software
|
93,768
|
4
|
||||||
Music catalogs
|
19,837
|
14
|
||||||
Other
|
7,534
|
11
|
|
Yen in millions
|
|||||||||||||||
|
March 31, 2019
|
March 31, 2020
|
||||||||||||||
|
Gross carrying
amount |
|
Accumulated
amortization |
|
Gross carrying
amount |
|
Accumulated
amortization |
|
||||||||
Patent rights,
know-how
and license agreements
|
169,761
|
(145,525
|
) |
166,076
|
(146,051
|
) | ||||||||||
Customer relationships
|
15,759
|
(11,825
|
) |
16,104
|
(12,467
|
) | ||||||||||
Trademarks
|
15,768
|
(9,863
|
) |
11,152
|
(6,114
|
) | ||||||||||
Software to be sold, leased or otherwise marketed
|
125,350
|
(96,322
|
) |
141,111
|
(110,663
|
) | ||||||||||
Internal-use
software
|
529,022
|
(345,935
|
) |
594,109
|
(384,236
|
) | ||||||||||
Music catalogs
|
615,206
|
(106,725
|
) |
612,266
|
(124,787
|
) | ||||||||||
Artist contracts
|
42,575
|
(29,108
|
) |
41,764
|
(29,017
|
) | ||||||||||
Television carriage contracts (broadcasting agreements)
|
74,605
|
(28,685
|
) |
53,266
|
(21,645
|
) | ||||||||||
Other
|
61,675
|
(49,288
|
) |
64,456
|
(51,317
|
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
1,649,721
|
(823,276
|
) |
1,700,304
|
(886,297
|
) | ||||||||||
Fiscal year ending March 31
|
Yen in millions
|
|
||
2021
|
97,978
|
|||
2022
|
82,057
|
|||
2023
|
66,079
|
|||
2024
|
50,098
|
|||
2025
|
38,658
|
|
Yen in millions
|
|||||||
|
March 31
|
|||||||
|
2019
|
|
2020
|
|
||||
Trademarks
|
69,447
|
69,975
|
||||||
Distribution agreements
|
18,834
|
18,834
|
||||||
Other
|
3,240
|
3,494
|
||||||
|
|
|
|
|||||
Total
|
91,521
|
92,303
|
||||||
|
G&NS
|
|
Music
|
|
Pictures
|
|
EP&S
|
|
I&SS
|
|
Financial
Services |
|
All
Other |
|
Total
|
|
||||||||||||||||
Balance, March 31, 2018:
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Goodwill — gross
|
150,606
|
165,700
|
246,620
|
194,468
|
45,793
|
7,931
|
27,912
|
839,030
|
||||||||||||||||||||||||
Accumulated impairments
|
—
|
(306
|
) |
(102,208
|
) |
(181,665
|
) |
—
|
(706
|
) |
(23,653
|
) |
(308,538
|
) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Goodwill
|
150,606
|
165,394
|
144,412
|
12,803
|
45,793
|
7,225
|
4,259
|
530,492
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Increase (decrease) due to:
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Acquisitions
*
|
2,261
|
240,396
|
387
|
—
|
—
|
—
|
—
|
243,044
|
||||||||||||||||||||||||
Sales and dispositions
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||
Impairments
|
—
|
—
|
—
|
(776
|
) |
—
|
—
|
(4,331
|
) |
(5,107
|
) | |||||||||||||||||||||
Translation adjustments
|
1,088
|
(2,420
|
) |
3,673
|
(73
|
) |
771
|
—
|
72
|
3,111
|
||||||||||||||||||||||
Other
|
—
|
—
|
(2,988
|
) |
—
|
—
|
—
|
—
|
(2,988
|
) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance, March 31, 2019:
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Goodwill — gross
|
153,955
|
403,676
|
252,262
|
194,416
|
46,564
|
7,931
|
28,570
|
1,087,374
|
||||||||||||||||||||||||
Accumulated impairments
|
—
|
(306
|
) |
(106,778
|
) |
(182,462
|
) |
—
|
(706
|
) |
(28,570
|
) |
(318,822
|
) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Goodwill
|
153,955
|
403,370
|
145,484
|
11,954
|
46,564
|
7,225
|
—
|
768,552
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Increase (decrease) due to:
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Acquisitions
*
|
17,945
|
2,956
|
14,889
|
364
|
—
|
3,609
|
—
|
39,763
|
||||||||||||||||||||||||
Sales and dispositions
|
—
|
—
|
(609
|
) |
—
|
—
|
—
|
—
|
(609
|
) | ||||||||||||||||||||||
Impairments
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||
Translation adjustments
|
(926
|
) |
(13,802
|
) |
(5,410
|
) |
(129
|
) |
(372
|
) |
—
|
—
|
(20,639
|
) | ||||||||||||||||||
Other
|
—
|
(1,199
|
) |
(1,980
|
) |
—
|
—
|
—
|
—
|
(3,179
|
) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance, March 31, 2020:
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Goodwill — gross
|
170,974
|
391,631
|
257,074
|
194,635
|
46,192
|
11,540
|
28,269
|
1,100,315
|
||||||||||||||||||||||||
Accumulated impairments
|
—
|
(306
|
) |
(104,700
|
) |
(182,446
|
) |
—
|
(706
|
) |
(28,269
|
) |
(316,427
|
) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Goodwill
|
170,974
|
391,325
|
152,374
|
12,189
|
46,192
|
10,834
|
—
|
783,888
|
||||||||||||||||||||||||
*
|
Acquisitions for the fiscal year ended March 31, 2019 relate mainly to the acquisition of EMI Music Publishing in the Music segment. Acquisitions for the fiscal year ended March 31, 2020 relate mainly to the acquisition of Insomniac Games, Inc. in the G&NS segment, Silvergate Media in the Pictures segment and AEGON Sony Life Insurance Co., Ltd. and SA Reinsurance Ltd. in the Financial Services segment. Refer to Note 25.
|
10.
|
Insurance-related accounts
|
(1)
|
Insurance policies
|
(2)
|
Deferred insurance acquisition costs
|
(3)
|
Future insurance policy benefits
|
(4)
|
Policyholders’ account in the life insurance business
|
|
Yen in millions
|
|||||||
|
March 31
|
|||||||
|
2019
|
|
2020
|
|
||||
Universal life insurance
|
2,104,646
|
2,611,577
|
||||||
Investment contracts
|
816,903
|
885,690
|
||||||
Other
|
126,653
|
145,004
|
||||||
|
|
|
|
|||||
Total
|
3,048,202
|
3,642,271
|
||||||
(5)
|
Minimum guarantee benefit for variable annuities and variable life insurance contracts
|
|
|
Yen in million
s
|
|
|||||||||
|
|
March 31, 2019
|
|
|||||||||
|
|
Variable annuities
|
|
|
Variable life
insurance contracts
|
|
|
Total
|
|
|||
Policyholder
s
’ account value
|
—
|
1,092,559
|
1,092,559
|
|||||||||
Net amount at risk
|
—
|
4,334,224
|
4,334,224
|
|||||||||
Liability for minimum guarantee benefit
|
—
|
63,423
|
63,423
|
|
|
Age
|
|
|||||
|
|
March 31 2019
|
|
|||||
|
|
Variable annuities
|
|
|
Variable life
insurance contracts
|
|
||
Average attained age
|
—
|
44
|
|
Yen in million
s
|
|||||||||||
|
March 31
,
2020
|
|||||||||||
|
Variable annuities
|
|
Variable life
insurance contracts
|
|
Total
|
|
||||||
Policyholder
s
’ account value
|
464,093
|
1,096,935
|
1,561,028
|
|||||||||
Net amount at risk
|
71,685
|
4,564,214
|
4,635,899
|
|||||||||
Liability for minimum guarantee benefit
|
64,045
|
79,860
|
143,905
|
|
|
Age
|
|
|||||
|
|
March 31 2020
|
|
|||||
|
|
Variable annuities
|
|
|
Variable life
insurance contracts
|
|
||
Average attained age
|
60
|
45
|
11.
|
Short-term borrowings and long-term debt
|
|
Yen in millions
|
|||||||
|
March 31
|
|||||||
|
2019
|
|
2020
|
|
||||
Unsecured loans:
|
|
|
||||||
with a weighted-average interest rate of 2.52%
|
55,186
|
|
||||||
with a weighted-average interest rate of 0.86%
|
|
91,725
|
||||||
Repurchase agreement:
|
|
|
||||||
with a weighted-average interest rate of 0.56%
|
432,820
|
|
||||||
with a weighted-average interest rate of 0.93%
|
|
567,194
|
||||||
Secured call money:
|
|
|
||||||
with a weighted-average interest rate of 0.18%
|
130,612
|
|
||||||
with a weighted-average interest rate of 0.13%
|
|
151,257
|
||||||
|
|
|
|
|||||
|
618,618
|
810,176
|
||||||
|
Yen in millions
|
|||||||
|
March 31
|
|||||||
|
2019
|
|
2020
|
|
||||
Unsecured loans, representing obligations principally to banks:
|
|
|
||||||
Due 2019 to 2024, with interest rates ranging from 0.01 % to 7.89 % per annum
|
57,321
|
|
||||||
Due 2020 to 2029, with interest rates ranging from 0.01 % to 5.10 % per annum
|
|
17,880
|
||||||
Unsecured 0.05% bonds, due 2019
|
69,964
|
|
||||||
Unsecured 2.07% bonds, due 2019
|
50,000
|
|
||||||
Unsecured 0.23% bonds, due 2021
|
89,819
|
89,894
|
||||||
Unsecured 0.11% bonds, due 2022
|
10,000
|
10,000
|
||||||
Unsecured 1.41% bonds, due 2022
|
10,000
|
10,000
|
||||||
Unsecured 0.28% bonds, due 2023
|
15,000
|
15,000
|
||||||
Unsecured 0.13% bonds, due 2024
|
|
29,886
|
||||||
Unsecured 0.22% bonds, due 2025
|
10,000
|
10,000
|
||||||
Unsecured 0.42% bonds, due 2026
|
24,911
|
24,923
|
||||||
Unsecured 0.18% bonds, due 2026
|
|
10,000
|
||||||
Unsecured 0.30% bonds, due 2029
|
|
59,738
|
||||||
Unsecured zero coupon convertible bonds, due 2022:
|
|
|
||||||
Conversion price 5,008.0 yen per common share
|
|
|
119,961
|
|
|
|
|
|
Conversion price 4,996.0 yen per common share
|
|
119,531
|
||||||
Secured 0.00% loans, due 2020 to 2023
|
200,003
|
201,205
|
||||||
Finance lease liabilities and
other*:
|
|
|
||||||
Due 2019 to 2048, with interest rates ranging from 0.36% to 9.14% per annum
|
72,991
|
|
||||||
Due 2020 to 2050, with interest rates ranging from 0.01% to 12.59% per annum
|
|
56,350
|
||||||
Guarantee deposits received
|
10,863
|
10,366
|
||||||
|
|
|
|
|||||
|
740,833
|
664,773
|
||||||
Less — Portion due within one year
|
172,461
|
29,807
|
||||||
|
|
|
|
|||||
|
568,372
|
634,966
|
||||||
*
|
Finance lease liabilities and other were represented as Capital lease obligations and other as of the fiscal year ended March 31, 2019.
|
Fiscal year ending March 31
|
Yen in millions
|
|
||
2021
|
29,807
|
|||
2022
|
159,102
|
|||
2023
|
229,617
|
|||
2024
|
81,041
|
|||
2025
|
43,923
|
|||
Later fiscal years
|
121,283
|
|||
|
|
|||
Total
|
664,773
|
|||
12.
|
Housing loans and deposits from customers in the banking business
|
(1)
|
Housing loans in the banking business
|
(2)
|
Deposits from customers in the banking business
|
Fiscal year ending March 31
|
Yen in millions
|
|
||
2022
|
39,145
|
|||
2023
|
16,102
|
|||
2024
|
10,513
|
|||
2025
|
3,238
|
|||
2026
|
2,190
|
|||
Later fiscal years
|
12,823
|
|||
|
|
|||
Total
|
84,011
|
|||
13.
|
Fair value measurements
|
(1)
|
Assets and liabilities that are measured at fair value on a recurring basis
|
|
Yen in millions
|
|||||||||||||||||||||||||||||||
|
March 31, 2019
|
|||||||||||||||||||||||||||||||
|
|
Presentation in the consolidated balance sheets
|
||||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Marketable
securities |
|
Securities
investments and other |
|
Other
current assets |
|
Other
noncurrent assets |
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Debt securities
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Trading securities
|
22,105
|
212,012
|
—
|
234,117
|
234,117
|
—
|
—
|
—
|
||||||||||||||||||||||||
Available-for-sale
securities
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Japanese national government bonds
|
—
|
1,643,589
|
—
|
1,643,589
|
18,719
|
1,624,870
|
—
|
—
|
||||||||||||||||||||||||
Japanese local government bonds
|
—
|
67,497
|
—
|
67,497
|
7,768
|
59,729
|
—
|
—
|
||||||||||||||||||||||||
Japanese corporate bonds
|
—
|
219,388
|
—
|
219,388
|
11,472
|
207,916
|
—
|
—
|
||||||||||||||||||||||||
Foreign government bonds
*1
|
—
|
161,495
|
—
|
161,495
|
3,984
|
157,511
|
—
|
—
|
||||||||||||||||||||||||
Foreign corporate bonds
*2
|
—
|
338,163
|
22,704
|
360,867
|
90,801
|
270,066
|
—
|
—
|
||||||||||||||||||||||||
Securitized products
*3
|
—
|
25,029
|
165,083
|
190,112
|
—
|
190,112
|
—
|
—
|
||||||||||||||||||||||||
Other
|
—
|
4,688
|
—
|
4,688
|
—
|
4,688
|
—
|
—
|
||||||||||||||||||||||||
Equity securities
|
1,037,100
|
135,794
|
—
|
1,172,894
|
951,390
|
221,504
|
—
|
—
|
||||||||||||||||||||||||
Other investments
*4
|
5,489
|
1,507
|
6,918
|
13,914
|
—
|
13,914
|
—
|
—
|
||||||||||||||||||||||||
Derivative assets
*5
|
444
|
10,042
|
—
|
10,486
|
—
|
—
|
9,431
|
1,055
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total assets
|
1,065,138
|
2,819,204
|
194,705
|
4,079,047
|
1,318,251
|
2,750,310
|
9,431
|
1,055
|
||||||||||||||||||||||||
|
|
Presentation in the consolidated balance sheets
|
||||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Future insurance policy benefits
|
|
Policyholders’ account
|
|
Other current liabilities
|
|
Other noncurrent liabilitie
s
|
|
||||||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Derivative liabilities
*5
|
136
|
32,686
|
—
|
32,822
|
—
|
—
|
19,852
|
12,970
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total liabilities
|
136
|
32,686
|
—
|
32,822
|
—
|
—
|
19,852
|
12,970
|
||||||||||||||||||||||||
|
Yen in millions
|
|||||||||||||||||||||||||||||||
|
March 31, 2020
|
|||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Presentation in the consolidated balance sheets
|
|||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Marketable
securities |
|
Securities
investments and other |
|
Other
current assets |
|
Other
noncurrent assets |
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Debt securities
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Trading securities
|
24,330
|
245,790
|
—
|
270,120
|
270,120
|
—
|
—
|
—
|
||||||||||||||||||||||||
Available-for-sale
securities
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Japanese national government bonds
|
—
|
1,761,929
|
—
|
1,761,929
|
10,011
|
1,751,918
|
—
|
—
|
||||||||||||||||||||||||
Japanese local government bonds
|
—
|
69,172
|
—
|
69,172
|
15,334
|
53,838
|
—
|
—
|
||||||||||||||||||||||||
Japanese corporate bonds
|
—
|
220,679
|
30
|
220,709
|
14,774
|
205,935
|
—
|
—
|
||||||||||||||||||||||||
Foreign government bonds
*1
|
—
|
279,777
|
—
|
279,777
|
2,690
|
277,087
|
—
|
—
|
||||||||||||||||||||||||
Foreign corporate bonds
*2
|
—
|
343,980
|
15,770
|
359,750
|
94,156
|
265,594
|
—
|
—
|
||||||||||||||||||||||||
Securitized products
*3
|
—
|
33,383
|
171,840
|
205,223
|
—
|
205,223
|
—
|
—
|
||||||||||||||||||||||||
Other
|
—
|
4,152
|
12,101
|
16,253
|
—
|
16,253
|
—
|
—
|
||||||||||||||||||||||||
Equity securities
|
950,744
|
581,642
|
—
|
1,532,386
|
1,434,612
|
97,774
|
—
|
—
|
||||||||||||||||||||||||
Other investments
*4
|
7,162
|
816
|
9,242
|
17,220
|
—
|
17,220
|
—
|
—
|
||||||||||||||||||||||||
Derivative assets
*5
|
1,310
|
41,073
|
—
|
42,383
|
—
|
—
|
40,784
|
1,599
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total assets
|
|
983,546
|
3,582,393
|
208,983
|
4,774,922
|
1,841,697
|
2,890,842
|
40,784
|
1,599
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Presentation in the consolidated balance sheets
|
|||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Future
insurance
policy
benefits
|
|
Policyholders’
account
|
|
Other
current
liabilities
|
|
Other
noncurrent
liabilities
|
|
||||||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Future insurance policy benefits and policyholders’ account in the life insurance business
*6
|
—
|
—
|
532,191
|
532,191
|
64,045
|
468,146
|
—
|
—
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Derivative liabilities
*5
|
2,077
|
33,789
|
—
|
35,866
|
—
|
—
|
16,814
|
19,052
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total liabilities
|
2,077
|
33,789
|
532,191
|
568,057
|
64,045
|
468,146
|
16,814
|
19,052
|
||||||||||||||||||||||||
*1 |
4,910 million yen and 7,771 million yen are included in foreign securities for which the fair value option has been elected and classified in level 2 for the fiscal years ended March 31, 2019 and 2020
.
In the consolidated balance sheets, 2,386 million yen are included as marketable securities for the fiscal years ended March 31, 2020 and 4,910 million yen and 5,385 million yen are included as securities investment and other for the fiscal years ended March 31, 2019 and 2020, respectively.
|
*2 | 173,964 million yen and 188,426 million yen are included in foreign securities for which the fair value option has been elected and classified in level 2 for the fiscal years ended March 31, 2019 and 2020, respectively. In the consolidated balance sheets, 33,391 million yen and 34,502 million yen are included as marketable securities and 140,573 million yen and 153,924 million yen are included as securities investment and other for the fiscal years ended March 31, 2019 and 2020, respectively. |
*3 | 185,195 million yen and 193,430 million yen are included in foreign securities for which the fair value option has been elected and classified in level 2 and level 3 for the fiscal years ended March 31, 2019 and 2020, respectively, and are included in the consolidated balance sheets as securities investments and other. |
*4 | Other investments include certain hybrid financial instruments and certain private equity investments. |
*5 | Derivative assets and liabilities are recognized and disclosed on a gross basis. |
*6 |
Future insurance policy benefits and policyholders’ account in the life insurance business are those for which the fair value option has been elected.
|
|
Net gains of 85 million yen and net loss of 12,408 million yen arising from
assets and liabilities
for which the fair value option has been elected are included in financial services revenue and financial services expense in the consolidated statements of income for the fiscal years ended March 31, 2019 and 2020, respectively.
|
|
Yen in millions
|
|||||||||||||||||||||||
|
Fiscal year ended March 31, 2019
|
|||||||||||||||||||||||
|
Assets
|
Liabilities
|
|
|||||||||||||||||||||
|
Debt securities
|
|
|
|
Future
insurance policy benefits and
Policyholders’
account |
|
||||||||||||||||||
|
Available-for-sale securities
|
|
|
|
||||||||||||||||||||
|
Japanese
corporate bonds |
|
Foreign
corporate bonds |
|
Securitized
products |
|
|
Other
|
|
Other
investments |
|
|||||||||||||
Beginning balance
|
—
|
27,878
|
83,614
|
|
|
—
|
|
9,104
|
—
|
|||||||||||||||
Total realized and unrealized gains (losses):
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Included in earnings
*1
|
—
|
465
|
562
|
|
|
—
|
|
276
|
—
|
|||||||||||||||
Included in other comprehensive income
*2
|
—
|
131
|
1
|
|
|
—
|
|
—
|
—
|
|||||||||||||||
Purchases and Issuances
|
—
|
5,787
|
94,696
|
|
|
—
|
|
4
|
—
|
|||||||||||||||
Sales
|
—
|
—
|
—
|
|
|
—
|
|
(6
|
) |
—
|
||||||||||||||
Settlements
|
—
|
(10,435
|
) |
(13,601
|
) |
|
|
—
|
|
(2,460
|
) |
—
|
||||||||||||
Transfers into level 3
*3
|
—
|
20,863
|
5,284
|
|
|
—
|
|
—
|
—
|
|||||||||||||||
Transfers out of level 3
*4
|
—
|
(21,985
|
) |
(5,473
|
) |
|
|
—
|
|
—
|
—
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Ending balance
|
|
|
—
|
|
|
|
22,704
|
|
|
|
165,083
|
|
|
|
—
|
|
|
|
6,918
|
|
|
|
—
|
|
Changes in unrealized gains (losses)
still held at |
|
|
|
|
|
|
|
|
|
|||||||||||||||
Included in earnings
*1
|
—
|
219
|
510
|
|
|
—
|
|
441
|
—
|
|
Yen in millions
|
|||||||||||||||||||||||
|
Fiscal year ended March 31, 2020
|
|||||||||||||||||||||||
|
Assets
|
Liabilities
|
|
|||||||||||||||||||||
|
Debt securities
|
|
|
|
Future
insurance policy benefits and Policyholder
s
’
account
|
|
||||||||||||||||||
|
Available-for-sale securities
|
|
|
|
||||||||||||||||||||
|
Japanese
corporate bonds |
|
Foreign
corporate bonds |
|
Securitized
products |
|
|
Other
|
|
Other
investments |
|
|||||||||||||
Beginning balance
|
—
|
22,704
|
165,083
|
|
|
—
|
|
6,918
|
—
|
|||||||||||||||
Acquisition of AEGON Sony Life Insurance Co.,
SA Reinsurance Ltd.
*5
|
—
|
—
|
—
|
|
|
—
|
|
—
|
547,190
|
|||||||||||||||
Total realized and unrealized gains (losses):
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Included in earnings
*1
|
—
|
311
|
(18,151
|
) |
|
|
—
|
|
(500
|
) |
12,500
|
|||||||||||||
Included
*2
|
—
|
(73
|
)
|
1
|
—
|
—
|
3,032
|
|||||||||||||||||
Purchases and Issuances
|
30
|
13,597
|
40,175
|
|
|
12,101
|
|
4,711
|
5,295
|
|||||||||||||||
Sales
|
—
|
—
|
—
|
|
|
—
|
|
(9
|
) |
—
|
||||||||||||||
Settlements
|
—
|
(20,867
|
) |
(12,967
|
) |
|
|
—
|
|
(1,878
|
) |
(4,762
|
) | |||||||||||
Transfers into level 3
*3
|
—
|
3,374
|
—
|
|
|
—
|
|
—
|
—
|
|||||||||||||||
Transfers out of level 3
*4
|
—
|
(3,276
|
) |
(2,301
|
) |
|
|
—
|
|
—
|
—
|
|||||||||||||
Ending balance
|
|
|
30
|
|
|
|
15,770
|
|
|
|
171,840
|
|
|
|
12,101
|
|
|
|
9,242
|
|
|
|
532,191
|
|
Changes in unrealized gains (losses) relating to instruments still held at reporting date:
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Included in earnings
*1
|
—
|
(94
|
) |
(16,507
|
) |
|
|
—
|
|
(376
|
) |
10,273
|
*1 |
Earning effects are included in financi
a
l services revenue and financial services expense in the consolidated statements of income.
|
*2 |
Unrealized gains (losses) are included in unrealized gains (losses) on securities, net for available-for-sale securities and included in debt valuation adjustments for future insurance policy benefits and policyholders’ account in the consolidated statements of comprehensive income.
|
*3 | Certain corporate bonds and certain securitized products were transferred into level 3 because differences between the fair value determined by indicative quotes from dealers and the fair value determined by internally developed prices became significant and the observability of the inputs used decreased. |
*4 | Certain corporate bonds and certain securitized products were transferred out of level 3 because observable market data became available. |
*5
|
Refer to Note 25
|
(2)
|
Assets and liabilities that are measured at fair value on a nonrecurring basis
|
(3)
|
Financial instruments
|
|
Yen in millions
|
|||||||||||||||||||
|
March 31, 2019
|
|||||||||||||||||||
|
Estimated fair value
|
Carrying
amount |
|
|||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Total
|
|
||||||||||
Assets:
|
|
|
|
|
|
|||||||||||||||
Housing loans in the banking business
|
—
|
1,861,384
|
—
|
1,861,384
|
1,685,504
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets
|
—
|
1,861,384
|
—
|
1,861,384
|
1,685,504
|
|||||||||||||||
Liabilities:
|
|
|
|
|
|
|||||||||||||||
Long-term debt including the current portion
|
—
|
737,529
|
—
|
737,529
|
740,833
|
|||||||||||||||
Investment contracts included in policyholders’ account in the life insurance business
|
—
|
877,157
|
—
|
877,157
|
816,903
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities
|
—
|
1,614,686
|
—
|
1,614,686
|
1,557,736
|
|||||||||||||||
|
Yen in millions
|
|||||||||||||||||||
|
March 31, 2020
|
|||||||||||||||||||
|
Estimated fair value
|
Carrying
amount |
|
|||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Total
|
|
||||||||||
Assets:
|
|
|
|
|
|
|||||||||||||||
Housing loans in the banking business
|
—
|
2,161,432
|
—
|
2,161,432
|
1,927,054
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets
|
—
|
2,161,432
|
—
|
2,161,432
|
1,927,054
|
|||||||||||||||
Liabilities:
|
|
|
|
|
|
|||||||||||||||
Long-term debt including the current portion
|
—
|
699,358
|
—
|
699,358
|
664,773
|
|||||||||||||||
Investment contracts included in policyholders’ account in the life insurance business
|
—
|
969,464
|
—
|
969,464
|
885,690
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities
|
—
|
1,668,822
|
—
|
1,668,822
|
1,550,463
|
|||||||||||||||
14.
|
Derivative instruments and hedging activities
|
Derivatives designated as hedging
instruments |
Yen in millions
|
|||||||||||||||||||
Balance sheet location
|
Fair value
|
Balance sheet location
|
Fair value
|
|||||||||||||||||
|
March 31
|
|
March 31
|
|||||||||||||||||
Asset derivatives
|
2019
|
|
2020
|
|
Liability derivatives
|
2019
|
|
2020
|
|
|||||||||||
Interest rate contracts
|
Prepaid expenses and other current assets
|
10
|
9
|
Current liabilities: Other
|
141
|
183
|
||||||||||||||
Interest rate contracts
|
Other assets: Other
|
101
|
27
|
Liabilities: Other
|
8,274
|
8,177
|
||||||||||||||
Foreign exchange contracts
|
Prepaid expenses and other current assets
|
131
|
1,799
|
Current liabilities: Other
|
42
|
—
|
||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
|
|
242
|
1,835
|
|
8,457
|
8,360
|
||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Derivatives not designated as
hedging instruments |
Yen in millions
|
|||||||||||||||||||
Balance sheet location
|
Fair value
|
Balance sheet location
|
Fair value
|
|||||||||||||||||
|
March 31
|
|
March 31
|
|||||||||||||||||
Asset derivatives
|
2019
|
|
2020
|
|
Liability derivatives
|
2019
|
|
2020
|
|
|||||||||||
Interest rate contracts
|
Prepaid expenses and other current assets
|
39
|
44
|
Current liabilities: Other
|
344
|
200
|
||||||||||||||
Interest rate contracts
|
Other assets: Other
|
882
|
1,523
|
Liabilities: Other
|
3,637
|
9,120
|
||||||||||||||
Foreign exchange contracts
|
Prepaid expenses and other current assets
|
8,807
|
19,655
|
Current liabilities: Other
|
11,549
|
14,580
|
||||||||||||||
Foreign exchange contracts
|
Other assets: Other
|
72
|
49
|
Liabilities: Other
|
1,059
|
1,755
|
||||||||||||||
Equity contracts
|
Prepaid expenses and other current assets
|
444
|
18,886
|
Current liabilities: Other
|
7,776
|
1,476
|
||||||||||||||
Bond contracts
|
Prepaid expenses and other current assets
|
—
|
306
|
Current liabilities: Other
|
—
|
290
|
||||||||||||||
Commodity contracts
|
Prepaid expenses and other current assets
|
—
|
85
|
Current liabilities: Other
|
—
|
85
|
||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
|
|
10,244
|
40,548
|
|
24,365
|
27,506
|
||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total derivatives
|
|
10,486
|
42,383
|
|
32,822
|
35,866
|
||||||||||||||
Derivatives under fair value
hedging relationships
|
Yen in millions
|
|||||||||||||
Location of gains or (losses) recognized
in income on derivative instruments |
Amounts of gains or (losses) recognized
in income on derivative instruments |
|||||||||||||
Fiscal year ended March 31
|
||||||||||||||
2018
|
|
2019
|
|
2020
|
|
|||||||||
Interest rate contracts
|
Financial services revenue
|
(52
|
) |
(1,835
|
) |
(3,925
|
) | |||||||
|
|
|
|
|
|
|||||||||
Total
|
|
(52
|
) |
(1,835
|
) |
(3,925
|
) | |||||||
|
Yen in millions
|
|||||||||||
Derivatives under cash flow
hedging relationships
|
Fiscal year ended March 31
|
|||||||||||
2018
|
|
2019
|
|
2020
|
|
|||||||
|
Amounts recognized in unrealized gains (losses) on derivative
instruments in OCI
(before tax) |
|||||||||||
Foreign exchange contracts
:
|
|
|
|
|||||||||
Components included in the assessment of hedge effectiveness
|
(2,295
|
) |
2,315
|
1,712
|
||||||||
Components excluded from the assessment of hedge effectiveness that were recognized based on amortization approach
|
—
|
—
|
1,087
|
|||||||||
|
|
|
|
|
|
|||||||
Total
|
(2,295
|
) |
2,315
|
2,799
|
||||||||
Derivatives under cash flow
hedging relationships
|
Yen in millions
|
|||||||||||||
Affected line item in consolidated
statements of income
|
Fiscal year ended March 31
|
|||||||||||||
2018
|
|
2019
|
|
2020
|
|
|||||||||
Amounts reclassified from unrealized
gains (losses) on derivative instruments in accumulated OCI (before tax) |
||||||||||||||
Foreign exchange contracts
:
|
|
|
|
|
||||||||||
Components included in
the assessment of hedge effectiveness
|
Cost of sales
|
1,111
|
(1,093
|
) |
—
|
|||||||||
Net sales
|
—
|
—
|
106
|
|||||||||||
Components excluded from
the assessment of hedge effectiveness that were recognized based on amortization approach
|
Net sales
|
—
|
—
|
(1,087
|
) | |||||||||
|
|
|
|
|
|
|||||||||
Total
|
|
1,111
|
(1,093
|
) |
(981
|
) | ||||||||
Derivatives not designated as
hedging instruments |
Yen in millions
|
|||||||||||||
Location of gains or (losses) recognized
in income on derivative instruments |
Amounts of gains or (losses) recognized
in income on derivative instruments |
|||||||||||||
Fiscal year ended March 31
|
||||||||||||||
2018
|
|
2019
|
|
2020
|
|
|||||||||
Interest rate contracts
|
Financial services revenue
|
(1,544
|
) |
(3,192
|
) |
1,190
|
||||||||
Foreign exchange contracts
|
Financial services revenue
|
2,013
|
(8,198
|
) |
2,473
|
|||||||||
Foreign exchange contracts
|
Foreign exchange loss, net
|
21,370
|
(7,437
|
) |
10,184
|
|||||||||
Equity contracts
|
Financial services revenue
|
(11,665
|
) |
(7,649
|
) |
15,438
|
||||||||
Bond contracts
|
Financial services revenue
|
—
|
—
|
(2,954
|
) | |||||||||
Commodity contracts
|
Financial services revenue
|
—
|
—
|
110
|
||||||||||
|
|
|
|
|
|
|||||||||
Total
|
|
10,174
|
(26,476
|
) |
26,441
|
|||||||||
Derivatives under
fair value
hedging relationships
|
Yen in millions
|
|||||||||
Balance sheet location of
hedged items
|
March 31, 2020
|
|||||||||
Amortized cost
|
|
Cumulative effect to
carrying amount of
hedged items by fair value hedges
|
|
|||||||
Interest rate contracts
|
Marketable securities
|
15,255
|
—
|
|||||||
Interest rate contracts
|
Securities investments and other
|
91,080
|
—
|
|||||||
|
|
|
|
|||||||
Total
|
|
106,335
|
—
|
|||||||
|
Yen in millions
|
|||||||||||||||
|
March 31, 2019
|
March 31, 2020
|
||||||||||||||
|
Notional
amount |
|
Fair value
|
|
Notional
amount |
|
Fair value
|
|
||||||||
Foreign exchange contracts:
|
|
|
|
|
||||||||||||
Foreign exchange forward contracts
|
701,880
|
(304
|
) |
740,464
|
4,361
|
|||||||||||
Currency option contracts purchased
|
53,846
|
179
|
473
|
7
|
||||||||||||
Currency option contracts written
|
58,825
|
(35
|
) |
460
|
(5
|
) | ||||||||||
Currency swap agreements
|
959,777
|
(5,564
|
) |
893,874
|
(1,006
|
) | ||||||||||
Other currency contracts
|
68,513
|
2,084
|
62,080
|
1,811
|
||||||||||||
Interest rate contracts:
|
|
|
|
|
||||||||||||
Interest rate swap agreements
|
339,934
|
(11,346
|
) |
994,133
|
(16,019
|
) | ||||||||||
Interest rate swaption agreements
|
5,300
|
(18
|
) |
18,700
|
(58
|
) | ||||||||||
Equity contracts:
|
|
|
|
|
||||||||||||
Equity future contracts
|
58,725
|
308
|
63,354
|
(871
|
) | |||||||||||
Equity swap agreements
|
63,107
|
(7,640
|
) |
103,409
|
18,281
|
|||||||||||
Bond contracts:
|
|
|
|
|
||||||||||||
Bond
future contracts
|
—
|
—
|
56,546
|
16
|
||||||||||||
Commodity contracts:
|
|
|
|
|
||||||||||||
Commodity future contracts
|
—
|
—
|
1,465
|
0
|
|
Yen in millions
|
|||||||||||||||
|
As of March 31, 2019
|
|||||||||||||||
|
Gross amounts
presented in the consolidated
balance sheet
|
|
Gross amounts not offset in the
consolidated balance sheet that are subject to master netting agreements |
|
|
|||||||||||
|
Financial
instruments |
|
Cash collateral
|
|
Net amounts
|
|
||||||||||
Derivative assets subject to master netting agreements
|
6,855
|
3,442
|
136
|
3,277
|
||||||||||||
Derivative assets not subject to master netting agreements
|
3,631
|
|
|
3,631
|
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets
|
10,486
|
3,442
|
136
|
6,908
|
||||||||||||
Derivative liabilities subject to master netting agreements
|
25,872
|
3,970
|
20,191
|
1,711
|
||||||||||||
Derivative liabilities not subject to master netting agreements
|
6,950
|
|
|
6,950
|
||||||||||||
Repurchase, securities lending and similar arrangements
|
432,820
|
432,820
|
—
|
—
|
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities
|
465,642
|
436,790
|
20,191
|
8,661
|
||||||||||||
|
Yen in millions
|
|||||||||||||||
|
As of March 31, 2020
|
|||||||||||||||
|
Gross amounts
presented in the
consolidated
balance sheet
|
|
Gross amounts not offset in the
consolidated balance sheet that are subject to master netting agreements |
|
|
|||||||||||
|
Financial
instruments |
|
Cash collateral
|
|
Net amounts
|
|
||||||||||
Derivative assets subject to master netting agreements
|
38,281
|
12,614
|
20,545
|
5,122
|
||||||||||||
Derivative assets not subject to master netting agreements
|
4,102
|
|
|
4,102
|
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets
|
42,383
|
12,614
|
20,545
|
9,224
|
||||||||||||
Derivative liabilities subject to master netting agreements
|
31,896
|
7,086
|
23,873
|
937
|
||||||||||||
Derivative liabilities not subject to master netting agreements
|
3,970
|
|
|
3,970
|
||||||||||||
Repurchase, securities lending and similar arrangements
|
567,194
|
564,874
|
—
|
2,320
|
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities
|
603,060
|
571,960
|
23,873
|
7,227
|
||||||||||||
15.
|
Pension and severance plans
|
(1)
|
Defined benefit and severance plans
|
|
Yen in millions
|
|||||||||||
|
Fiscal year ended March 31
|
|||||||||||
|
2018
|
|
2019
|
|
2020
|
|
||||||
Service cost
|
25,185
|
23,128
|
17,948
|
|||||||||
Interest cost
|
8,024
|
7,020
|
4,162
|
|||||||||
Expected return on plan assets
|
(16,440
|
) |
(16,695
|
) |
(17,040
|
) | ||||||
Recognized actuarial loss
|
16,099
|
15,365
|
12,969
|
|||||||||
Amortization of prior service costs
|
(8,693
|
) |
(7,864
|
) |
(4,294
|
) | ||||||
Losses on curtailments and settlements
|
—
|
—
|
6,358
|
|||||||||
|
|
|
|
|
|
|||||||
Net periodic benefit costs
|
24,175
|
20,954
|
20,103
|
|||||||||
|
Yen in millions
|
|||||||||||
|
Fiscal year ended March 31
|
|||||||||||
|
2018
|
|
2019
|
|
2020
|
|
||||||
Service cost
|
3,181
|
2,780
|
3,616
|
|||||||||
Interest cost
|
10,393
|
10,083
|
9,212
|
|||||||||
Expected return on plan assets
|
(11,687
|
) |
(11,797
|
) |
(10,916
|
) | ||||||
Amortization of net transition asset
|
5
|
—
|
—
|
|||||||||
Recognized actuarial loss
|
3,014
|
2,656
|
2,606
|
|||||||||
Amortization of prior service costs
|
(574
|
) |
(269
|
) |
2
|
|||||||
Losses on curtailments and settlements
|
1,058
|
1,804
|
68
|
|||||||||
|
|
|
|
|
|
|||||||
Net periodic benefit costs
|
5,390
|
5,257
|
4,588
|
|||||||||
|
Japanese plans
|
Foreign plans
|
||||||||||||||
|
Yen in millions
|
Yen in millions
|
||||||||||||||
|
March 31
|
March 31
|
||||||||||||||
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
||||||||
Change in benefit obligation:
|
|
|
|
|
||||||||||||
Benefit obligation at beginning of the fiscal year
|
1,010,574
|
1,034,954
|
356,397
|
351,918
|
||||||||||||
Service cost
|
23,128
|
17,948
|
2,780
|
3,616
|
||||||||||||
Interest cost
|
7,020
|
4,162
|
10,083
|
9,212
|
||||||||||||
Plan participants’ contributions
|
—
|
—
|
462
|
487
|
||||||||||||
Plan amendments
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
10,210
|
|
Actuarial (gain) loss
|
29,295
|
(3,330
|
) |
1,700
|
19,776
|
|||||||||||
Foreign currency exchange rate changes
|
—
|
—
|
(1,554
|
) |
(16,919
|
) | ||||||||||
Curtailments and settlements
|
—
|
(359,205
|
) |
(6,120
|
) |
(4,434
|
) | |||||||||
Effect of changes in consolidated subsidiaries
|
—
|
—
|
1,947
|
—
|
||||||||||||
Other
|
6
|
2
|
—
|
—
|
||||||||||||
Benefits paid
|
(35,069
|
) |
(35,668
|
) |
(13,777
|
) |
(14,055
|
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Benefit obligation at end of the fiscal year
|
1,034,954
|
658,863
|
351,918
|
359,811
|
||||||||||||
Change in plan assets:
|
|
|
|
|
||||||||||||
Fair value of plan assets at beginning of the fiscal year
|
711,077
|
742,204
|
269,745
|
274,749
|
||||||||||||
Actual return on plan assets
|
18,701
|
2,942
|
15,243
|
26,738
|
||||||||||||
Foreign currency exchange rate changes
|
—
|
—
|
(838
|
) |
(14,904
|
) | ||||||||||
Employer contribution
|
36,875
|
7,453
|
8,542
|
9,916
|
||||||||||||
Plan participants’ contributions
|
—
|
—
|
462
|
487
|
||||||||||||
Curtailments and settlements
|
—
|
(284,333
|
) |
(5,960
|
) |
(3,146
|
) | |||||||||
Benefits paid
|
(24,449
|
) |
(31,060
|
) |
(12,445
|
) |
(12,730
|
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Fair value of plan assets at end of the fiscal year
|
742,204
|
437,206
|
274,749
|
281,110
|
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Funded status at end of the fiscal year
|
(292,750
|
) |
(221,657
|
) |
(77,169
|
) |
(78,701
|
) | ||||||||
|
Japanese plans
|
Foreign plans
|
||||||||||||||
|
Yen in millions
|
Yen in millions
|
||||||||||||||
|
March 31
|
March 31
|
||||||||||||||
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
||||||||
Noncurrent assets
|
3,476
|
3,391
|
14,745
|
24,777
|
||||||||||||
Current liabilities
|
—
|
—
|
(4,412
|
) |
(4,355
|
) | ||||||||||
Noncurrent liabilities
|
(296,226
|
) |
(225,048
|
) |
(87,502
|
) |
(99,123
|
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance
|
(292,750
|
) |
(221,657
|
) |
(77,169
|
) |
(78,701
|
) | ||||||||
|
Japanese plans
|
Foreign plans
|
||||||||||||||
|
Yen in millions
|
Yen in millions
|
||||||||||||||
|
March 31
|
March 31
|
||||||||||||||
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
||||||||
Prior service cost (credit)
|
(8,859
|
) |
(369
|
) |
(45
|
) |
10,058
|
|||||||||
Net actuarial loss
|
311,128
|
223,354
|
71,906
|
66,326
|
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance
|
302,269
|
222,985
|
71,861
|
76,384
|
||||||||||||
|
Japanese plans
|
Foreign plans
|
||||||||||||||
|
Yen in millions
|
Yen in millions
|
||||||||||||||
|
March 31
|
March 31
|
||||||||||||||
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
||||||||
Accumulated benefit obligations
|
1,029,910
|
654,209
|
336,185
|
354,100
|
|
Japanese plans
|
Foreign plans
|
||||||||||||||
|
Yen in millions
|
Yen in millions
|
||||||||||||||
|
March 31
|
March 31
|
||||||||||||||
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
||||||||
Projected benefit obligations
|
1,022,235
|
645,544
|
200,596
|
230,058
|
||||||||||||
Accumulated benefit obligations
|
1,017,191
|
640,890
|
196,928
|
226,080
|
||||||||||||
Fair value of plan assets
|
726,009
|
420,497
|
123,937
|
130,955
|
|
Japanese plans
|
Foreign plans
|
||||||||||||||
|
March 31
|
March 31
|
||||||||||||||
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
||||||||
Discount rate
|
0.6
|
% |
0.6
|
% |
2.8
|
% |
2.0
|
% | ||||||||
Rate of compensation increase
|
*
|
*
|
2.3
|
2.2
|
* | Substantially all of Sony’s Japanese pension plans were point-based. Point-based plans do not incorporate a measure of compensation rate increases. |
|
Japanese plans
|
Foreign plans
|
||||||||||||||||||||||
|
Fiscal year ended March 31
|
Fiscal year ended March 31
|
||||||||||||||||||||||
|
2018
|
|
2019
|
|
2020
|
|
2018
|
|
2019
|
|
2020
|
|
||||||||||||
Discount rate
|
0.9
|
% |
0.8
|
% |
0.6
|
% |
3.1
|
% |
2.9
|
% |
2.8
|
% | ||||||||||||
Expected return on plan assets
|
2.4
|
2.6
|
2.6
|
4.6
|
4.4
|
4.2
|
||||||||||||||||||
Rate of compensation increase
|
*
|
*
|
*
|
2.4
|
2.6
|
2.3
|
|
Japanese plans
|
|||||||||||||||
|
Yen in millions
|
|||||||||||||||
|
Fair value
at March 31,
2020
|
|
Fair value measurements
using inputs considered as
|
|||||||||||||
Asset class
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
||||||||||
Cash and cash equivalents
|
24,851
|
24,851
|
—
|
—
|
||||||||||||
Equity:
|
|
|
|
|
||||||||||||
Equity securities
*1
|
50,646
|
47,308
|
3,338
|
—
|
||||||||||||
Fixed income:
|
|
|
|
|
||||||||||||
Government bonds
*2
|
107,478
|
1,087
|
106,391
|
—
|
||||||||||||
Corporate bonds
*3
|
71,192
|
20
|
71,172
|
—
|
||||||||||||
Asset-backed securities
*4
|
1,090
|
—
|
1,090
|
—
|
||||||||||||
Commingled funds
*5
|
58,740
|
—
|
58,740
|
—
|
||||||||||||
Commodity funds
*6
|
21,823
|
—
|
21,823
|
—
|
||||||||||||
Private equity
*7
|
30,191
|
—
|
—
|
30,191
|
||||||||||||
Hedge funds
*8
|
48,410
|
—
|
—
|
48,410
|
||||||||||||
Real estate and other
*9
|
22,785
|
—
|
(2,586
|
)
|
25,371
|
|||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
437,206
|
73,266
|
259,968
|
103,972
|
||||||||||||
*1 | Includes approximately 51 percent and 37 percent of Japanese equity securities, and 49 percent and 63 percent of foreign equity securities for the fiscal years ended March 31, 2019 and 2020, respectively. |
*2 | Includes approximately 48 percent and 36 percent of debt securities issued by Japanese national and local governments, and 52 percent and 64 percent of debt securities issued by foreign national and local governments for the fiscal years ended March 31, 2019 and 2020, respectively. |
*3 | Includes debt securities issued by Japanese and foreign corporation and government related agencies. |
*4 | Includes primarily mortgage-backed securities. |
*5 | Commingled funds represent pooled institutional investments, including primarily investment trusts. They include approximately 50 percent and 50 percent of investments in equity, 49 percent and 45 percent of investments in fixed income, and 1 percent and 5 percent of investments in other for the fiscal years ended March 31, 2019 and 2020, respectively. |
*6 | Represents commodity futures funds. |
*7 | Includes multiple private equity funds of funds that primarily invest in venture, buyout, and distressed markets in the United States and Europe. |
*8 | Includes primarily funds that invest in a portfolio of a broad range of hedge funds to diversify the risks and reduce the volatilities associated with a single hedge fund. |
*9 | Includes primarily private real estate investment trusts. |
|
Foreign plans
|
|||||||||||||||
|
Yen in millions
|
|||||||||||||||
|
Fair value
at
2019
|
|
Fair value measurements
using inputs considered as
|
|||||||||||||
Asset class
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
||||||||||
Cash and cash equivalents
|
4,340
|
4,340
|
—
|
—
|
||||||||||||
Equity:
|
|
|
|
|
||||||||||||
Equity securities
*1
|
23,766
|
23,113
|
653
|
—
|
||||||||||||
Fixed income:
|
|
|
|
|
||||||||||||
Government bonds
*2
|
84,761
|
—
|
84,761
|
—
|
||||||||||||
Corporate bonds
*3
|
32,749
|
—
|
32,749
|
—
|
||||||||||||
Asset-backed securities
|
1,115
|
—
|
1,115
|
—
|
||||||||||||
Insurance contracts
*4
|
18,308
|
—
|
5,814
|
12,494
|
||||||||||||
Commingled funds
*5
|
76,503
|
—
|
76,503
|
—
|
||||||||||||
Real estate and other
*6
|
33,207
|
—
|
11,118
|
22,089
|
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
274,749
|
27,453
|
212,713
|
34,583
|
||||||||||||
|
Foreign plans
|
|||||||||||||||
|
Yen in millions
|
|||||||||||||||
|
Fair value
at
2020
|
|
Fair value measurements
using inputs considered as
|
|||||||||||||
Asset class
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
||||||||||
Cash and cash equivalents
|
4,632
|
4,632
|
—
|
—
|
||||||||||||
Equity:
|
|
|
|
|
||||||||||||
Equity securities
*1
|
18,380
|
17,762
|
618
|
—
|
||||||||||||
Fixed income:
|
|
|
|
|
||||||||||||
Government bonds
*2
|
93,826
|
—
|
93,826
|
—
|
||||||||||||
Corporate bonds
*3
|
31,769
|
—
|
31,769
|
—
|
||||||||||||
Asset-backed securities
|
1,320
|
—
|
1,320
|
—
|
||||||||||||
Insurance contracts
*4
|
19,334
|
—
|
7,156
|
12,178
|
||||||||||||
Commingled funds
*5
|
78,280
|
—
|
78,280
|
—
|
||||||||||||
Real estate and other
*6
|
33,569
|
—
|
11,272
|
22,297
|
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
281,110
|
22,394
|
224,241
|
34,475
|
||||||||||||
*1 | Includes primarily foreign equity securities. |
*2 | Includes primarily foreign government debt securities. |
*3 | Includes primarily foreign corporate debt securities. |
*4 | Represents annuity contracts with or without profit sharing. |
*5 | Commingled funds represent pooled institutional investments including mutual funds, common trust funds, and collective investment funds. They are primarily comprised of foreign equities and fixed income investments. |
*6 | Includes primarily private real estate investment trusts. |
|
Japanese plans
|
|||||||||||||||
|
Yen in millions
|
|||||||||||||||
|
Fair value measurement using significant unobservable inputs
(Level 3)
|
|||||||||||||||
|
Private equity
|
|
Hedge funds
|
|
Real estate
and other
|
|
Total
|
|
||||||||
Beginning balance at April 1, 2018
|
24,144
|
70,204
|
19,431
|
113,779
|
||||||||||||
Return on assets held at end of year
|
4,428
|
659
|
1,622
|
6,709
|
||||||||||||
Purchases, sales, and settlements, net
|
(616
|
) |
743
|
339
|
466
|
|||||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance at March 31, 2019
|
27,956
|
71,606
|
21,392
|
120,954
|
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Return on assets held at end of year
|
2,649
|
(648
|
) |
418
|
2,419
|
|||||||||||
Purchases, sales, and settlements, net
|
(414
|
) |
(22,548
|
) |
3,561
|
(19,401
|
) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance at March 31, 2020
|
30,191
|
48,410
|
25,371
|
103,972
|
||||||||||||
|
Foreign plans
|
|||||||||||||||
|
Yen in millions
|
|||||||||||||||
|
Fair value measurement using significant unobservable inputs
(Level 3)
|
|||||||||||||||
|
Insurance
contracts |
|
Corporate
bonds
|
|
Real estate
and other
|
|
Total
|
|
||||||||
Beginning balance at April 1, 2018
|
12,729
|
5,303
|
25,976
|
44,008
|
||||||||||||
Return on assets held at end of year
|
736
|
—
|
559
|
1,295
|
||||||||||||
Purchases, sales, and settlements, net
|
(389
|
) |
—
|
(3,809
|
) |
(4,198
|
) | |||||||||
Transfers, net
|
—
|
(5,540
|
) |
123
|
(5,417
|
) | ||||||||||
Other
*
|
(582
|
) |
237
|
(760
|
) |
(1,105
|
) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance at March 31, 2019
|
12,494
|
—
|
22,089
|
34,583
|
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Return on assets held at end of year
|
559
|
—
|
132
|
691
|
||||||||||||
Purchases, sales, and settlements, net
|
(373
|
) |
—
|
755
|
382
|
|||||||||||
Transfers, net
|
—
|
—
|
—
|
—
|
||||||||||||
Other
*
|
(502
|
) |
—
|
(679
|
) |
(1,181
|
) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance at March 31, 2020
|
12,178
|
—
|
22,297
|
34,475
|
||||||||||||
* | Primarily consists of translation adjustments. |
|
Japanese plans
|
|
Foreign plans
|
|
||||
Fiscal year ending March 31
|
Yen in millions
|
|
Yen in millions
|
|
||||
2021
|
37,384
|
20,825
|
||||||
2022
|
36,228
|
104,988
|
||||||
2023
|
36,985
|
12,089
|
||||||
2024
|
38,271
|
12,269
|
||||||
2025
|
37,216
|
13,074
|
||||||
2026 — 2030
|
185,218
|
112,218
|
(2)
|
Defined contribution plans
|
|
Yen in millions
|
|||||||||||
|
Fiscal year ended March 31
|
|||||||||||
|
2018
|
|
2019
|
|
2020
|
|
||||||
Japanese plans
|
3,237
|
3,353
|
6,925
|
|||||||||
Foreign plans
|
11,379
|
11,602
|
10,313
|
16.
|
Stockholders’ equity
|
(1)
|
Common stock
|
|
Number of shares
|
|
||
Balance at March 31, 2017
|
1,263,763,660
|
|||
Issuance of new shares
|
218,000
|
|||
Exercise of stock acquisition rights
|
2,565,700
|
|||
Conversion of convertible bonds
|
4,789
|
|||
|
|
|||
Balance at March 31, 2018
|
1,266,552,149
|
|||
Issuance of new shares
|
149,900
|
|||
Exercise of stock acquisition rights
|
4,525,300
|
|||
Conversion of convertible bonds
|
2,992
|
|||
|
|
|||
Balance at March 31, 2019
|
1,271,230,341
|
|||
|
|
|||
Issuance of new shares
|
184,900
|
|||
Exercise of stock acquisition rights
|
2,294,900
|
|||
Conversion of convertible bonds
|
86,040
|
|||
Cancellation of treasury stock
|
(12,737,400
|
) | ||
|
|
|||
Balance at March 31, 2020
|
1,261,058,781
|
|||
(2)
|
Retained earnings
|
(3)
|
Other comprehensive income
|
|
Yen in millions
|
|||||||||||||||||||
|
Unrealized
gains (losses) on securities |
|
Unrealized
gains (losses) on derivative instruments |
|
Pension
liability adjustment |
|
Foreign
currency translation adjustments |
|
Total
|
|
||||||||||
Balance at March 31, 2017
|
126,635
|
(58
|
) |
(308,736
|
) |
(436,610
|
) |
(618,769
|
) | |||||||||||
Other comprehensive income before reclassifications
|
2,013
|
(2,295
|
) |
1,779
|
(4,480
|
) |
(2,983
|
) | ||||||||||||
Amounts reclassified out of accumulated other
comprehensive income
*
|
(943
|
) |
1,111
|
10,611
|
(1,855
|
) |
8,924
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net other comprehensive income
|
1,070
|
(1,184
|
) |
12,390
|
(6,335
|
) |
5,941
|
|||||||||||||
Less: Other comprehensive income attributable to noncontrolling interests
|
1,514
|
—
|
98
|
2,306
|
3,918
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at March 31, 2018
|
126,191
|
(1,242
|
) |
(296,444
|
) |
(445,251
|
) |
(616,746
|
) | |||||||||||
|
Yen in millions
|
|||||||||||||||||||
|
Unrealized
gains (losses) on securities |
|
Unrealized
gains (losses) on derivative instruments |
|
Pension
liability
Adjustment
|
|
Foreign
currency translation adjustments |
|
Total
|
|
||||||||||
Balance at March 31, 2018
|
126,191
|
(1,242
|
) |
(296,444
|
) |
(445,251
|
) |
(616,746
|
) | |||||||||||
Cumulative effect of
ASU2016-01
|
(15,526
|
) |
—
|
—
|
—
|
(15,526
|
) | |||||||||||||
Other comprehensive income before reclassifications
|
33,124
|
2,316
|
(23,448
|
) |
10,071
|
22,063
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Amounts reclassified out of accumulated other comprehensive income
*
|
161
|
(1,093
|
) |
9,488
|
(1,627
|
) |
6,929
|
|||||||||||||
Net other comprehensive income
|
33,285
|
1,223
|
(13,960
|
) |
8,444
|
28,992
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Less: Other comprehensive income attributable to noncontrolling interests
|
8,915
|
—
|
53
|
(1,578
|
) |
7,390
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at March 31, 2019
|
135,035
|
(19
|
) |
(310,457
|
) |
(435,229
|
) |
(610,670
|
) | |||||||||||
|
Yen in millions
|
|||||||||||||||||||||||
|
Unrealized
gains (losses) on securities |
|
Unrealized
gains (losses) on derivative instruments |
|
Pension
liability adjustment |
|
Foreign
currency translation adjustments |
|
Debt
valuation adjustments |
|
Total
|
|
||||||||||||
Balance at March 31, 2019
|
135,035
|
(19
|
) |
(310,457
|
) |
(435,229
|
) |
—
|
(610,670
|
) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Other comprehensive income before reclassifications
|
40,334
|
1,193
|
(17,519
|
) |
(75,814
|
) |
3,032
|
(48,774
|
) | |||||||||||||||
Amounts reclassified out of accumulated other
comprehensive income
*
|
56
|
74
|
92,490
|
(74
|
) |
—
|
92,546
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net other comprehensive income
|
40,390
|
1,267
|
74,971
|
(75,888
|
) |
3,032
|
43,772
|
|||||||||||||||||
Less: Other comprehensive income attributable to noncontrolling interests
|
14,234
|
—
|
34
|
(1,245
|
) |
1,059
|
14,082
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at March 31, 2020
|
161,191
|
1,248
|
(235,520
|
) |
(509,872
|
) |
1,973
|
(580,980
|
) | |||||||||||||||
* | Foreign currency translation adjustments were transferred from accumulated other comprehensive income to net income as a result of a complete or substantially complete liquidation or sale of certain foreign subsidiaries and affiliates. |
|
Yen in millions
|
|
||||||||||||
Comprehensive income components
|
Amounts reclassified from
accumulated other comprehensive income |
Affected line items in consolidated
statements of income
|
||||||||||||
|
2018
|
|
2019
|
|
2020
|
|
|
|||||||
Unrealized gains (losses) on securities
|
(646
|
) |
235
|
82
|
Financial services revenue
|
|||||||||
|
(561
|
) |
—
|
—
|
Gain on sale of securities investments, net
|
|||||||||
|
|
|
|
|
|
|||||||||
Total before tax
|
(1,207
|
) |
235
|
82
|
|
|||||||||
Tax expense or (benefit)
|
264
|
(74
|
) |
(26
|
) |
|
||||||||
|
|
|
|
|
|
|||||||||
Net of tax
|
(943
|
) |
161
|
56
|
|
|||||||||
|
|
|
|
|
|
|||||||||
Unrealized gains (losses) on derivative instruments
|
1,111
|
(1,093
|
) |
—
|
Cost of sales
|
|||||||||
|
—
|
—
|
106
|
Net sales
|
||||||||||
|
|
|
|
|
|
|||||||||
Total before tax
|
1,111
|
(1,093
|
) |
106
|
|
|||||||||
Tax expense or (benefit)
|
—
|
—
|
(32
|
)
|
|
|||||||||
|
|
|
|
|
|
|||||||||
Net of tax
|
1,111
|
(1,093
|
) |
74
|
|
|||||||||
|
|
|
|
|
|
|||||||||
Pension liability adjustment
|
11,034
|
9,891
|
92,514
|
*
|
||||||||||
Tax expense or (benefit)
|
(423
|
) |
(403
|
) |
(24
|
) |
|
|||||||
|
|
|
|
|
|
|||||||||
Net of tax
|
10,611
|
9,488
|
92,490
|
|
||||||||||
|
|
|
|
|
|
|||||||||
Foreign currency translation adjustments
|
(1,855
|
) |
(1,627
|
) |
(74
|
) |
Foreign exchange loss, net and other operating (income) expense, net
|
|||||||
Tax expense or (benefit)
|
—
|
—
|
—
|
|
||||||||||
|
|
|
|
|
|
|||||||||
Net of tax
|
(1,855
|
) |
(1,627
|
) |
(74
|
) |
|
|||||||
|
|
|
|
|
|
|||||||||
Total amounts reclassified out of accumulated other comprehensive income, net of tax
|
8,924
|
6,929
|
92,546
|
|
||||||||||
* |
The amortization of pension and postretirement benefit components
is
included in the computation of net periodic pension cost. Refer to Note 15.
|
(4)
|
Equity transactions with noncontrolling interests
|
|
Yen in millions
|
|||||||||||
|
Fiscal year ended March 31
|
|||||||||||
|
2018
|
|
2019
|
|
2020
|
|
||||||
Net income attributable to Sony Corporation’s stockholders
|
490,794
|
916,271
|
582,191
|
|||||||||
Transfers (to) from the noncontrolling interests:
|
|
|
|
|||||||||
Increase (decrease) in additional
paid-in
capital for purchase of additional shares in consolidated subsidiaries
|
(74
|
) |
(22,775
|
) |
16,372
|
|||||||
|
|
|
|
|
|
|||||||
Change from net income attributable to Sony Corporation’s stockholders and transfers (to) from the noncontrolling interests
|
490,720
|
893,496
|
598,563
|
|||||||||
17.
|
Stock-based compensation plans
|
|
Fiscal year ended March 31
|
|||||||||||
|
2018
|
|
2019
|
|
2020
|
|
||||||
Weighted-average assumptions
|
|
|
|
|||||||||
Risk-free interest rate
|
1.14
|
% |
1.37
|
% |
0.70
|
% | ||||||
Expected lives
|
6.55
|
years |
5.98
|
years |
5.73
|
years | ||||||
Expected volatility
*
|
38.49
|
% |
32.52
|
% |
29.30
|
% | ||||||
Expected dividends
|
0.40
|
% |
0.35
|
% |
0.32
|
% |
* | Expected volatility was based on the historical volatilities of Sony Corporation’s common stock over the expected life of the stock acquisition rights. |
|
Fiscal year ended March 31, 2020
|
|||||||||||||||
|
Number of
shares |
|
Weighted-
average exercise price |
|
Weighted-
average remaining life |
|
Total
intrinsic
value
|
|
||||||||
|
|
|
Yen
|
|
Years
|
|
Yen in millions
|
|
||||||||
Outstanding at beginning of the fiscal year
|
12,213,900
|
3,665
|
|
|
||||||||||||
Granted
|
3,279,700
|
6,669
|
|
|
||||||||||||
Exercised
|
2,294,900
|
3,294
|
|
|
||||||||||||
Forfeited or expired
|
322,000
|
5,500
|
|
|
||||||||||||
Outstanding at end of the fiscal year
|
12,876,700
|
4,982
|
7.52
|
19,459
|
||||||||||||
Exercisable at end of the fiscal year
|
6,235,700
|
3,581
|
6.43
|
15,552
|
||||||||||||
18.
|
Kumamoto Earthquake
|
19.
|
Revenue
|
(1)
|
Contract balances
|
|
Yen in millions
|
|||||||
|
March
3
1,
2019
|
|
March 31,
2020
|
|
||||
Receivables from contracts with customers
*1
|
1,183,115
|
1,126,597
|
||||||
Contract assets
*1
|
19,147
|
13,985
|
||||||
Contract liabilities
*2
|
254,646
|
271,286
|
*1
|
Receivables from contracts with customers and contract assets are included in the consolidated balance sheets as “Notes and accounts receivable, trade and contract assets” and “Other”,
non-current.
|
*2 |
Contract liabilities are included in the consolidated balance sheets as “Other”, both current and
non-current.
|
(2)
|
Performance obligations
|
|
Yen in millions
|
|
||
|
March 31,
2020
|
|
||
569,081
|
||||
Pictures — Media Networks
|
22,333
|
|||
Music
*2
|
44,971
|
|||
Others
|
47,126
|
*1 | For Motion Pictures and Television Productions in the Pictures segment, Sony has included all contracts regardless of duration. |
*2 | Amount included in the Music segment primarily consists of minimum royalty guarantees or fixed fees in contracts related to license revenue for ongoing access to an evolving library of content. These contracts also include the potential for sales-based or usage-based royalties to exceed the minimum guarantees, and these additional royalties are excluded from the amount above, of which substantially all are recognized as revenue within three years. |
(3)
|
Contract costs
|
|
Yen in millions
|
|||||||
|
March 31
,
2019
|
|
March 31,
2020
|
|
||||
Incremental costs of obtaining a contract
|
6,581
|
7,464
|
(4)
|
Disaggregation of revenue
|
20.
|
Restructuring charges
|
|
Yen in millions
|
|||||||||||||||
|
Employee
termination benefits |
|
Non-cash
write-downs and disposals, net
*
|
|
Other
associated costs |
|
Total
|
|
||||||||
Balance at March 31, 2017
|
11,634
|
—
|
9,167
|
20,801
|
||||||||||||
Restructuring costs
|
18,999
|
2,233
|
1,147
|
22,379
|
||||||||||||
Non-cash
charges
|
—
|
(2,233
|
) |
—
|
(2,233
|
) | ||||||||||
Cash payments
|
(9,950
|
) |
—
|
(6,352
|
) |
(16,302
|
) | |||||||||
Adjustments
|
(1,197
|
) |
—
|
226
|
(971
|
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at March 31, 2018
|
19,486
|
—
|
4,188
|
23,674
|
||||||||||||
Restructuring costs
|
24,449
|
2,731
|
5,825
|
33,005
|
||||||||||||
Non-cash
charges
|
—
|
(2,731
|
) |
—
|
(2,731
|
) | ||||||||||
Cash payments
|
(19,150
|
) |
—
|
(2,555
|
) |
(21,705
|
) | |||||||||
Adjustments
|
955
|
—
|
(357
|
) |
598
|
|||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at March 31, 2019
|
25,740
|
—
|
7,101
|
32,841
|
||||||||||||
Restructuring costs
|
22,957
|
100
|
1,653
|
24,710
|
||||||||||||
Non-cash
charges
|
—
|
(100
|
) |
—
|
(100
|
) | ||||||||||
Cash payments
|
(23,385
|
) |
—
|
(6,703
|
) |
(30,088
|
) | |||||||||
Adjustments
|
(674
|
) |
—
|
(131
|
) |
(805
|
) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at March 31, 2020
|
24,638
|
—
|
1,920
|
26,558
|
||||||||||||
* | Significant asset impairments excluded from restructuring charges are described in Note 13. |
|
Yen in millions
|
|||||||||||||||||||
|
Fiscal year ended March 31, 2018
|
|||||||||||||||||||
|
Employee
termination benefits |
|
Other
associated
costs
*
|
|
Total net
restructuring charges |
|
Depreciation
associated with restructured assets |
|
Total
|
|
||||||||||
Game & Network Services
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||
Music
|
6,358
|
272
|
6,630
|
—
|
6,630
|
|||||||||||||||
Pictures
|
2,922
|
—
|
2,922
|
—
|
2,922
|
|||||||||||||||
Electronics Products & Solutions
|
3,384
|
118
|
3,502
|
0
|
3,502
|
|||||||||||||||
Imaging & Sensing Solutions
|
28
|
—
|
28
|
—
|
28
|
|||||||||||||||
Financial Services
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||
All Other and Corporate
|
6,307
|
2,990
|
9,297
|
26
|
9,323
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total
|
18,999
|
3,380
|
22,379
|
26
|
22,405
|
|||||||||||||||
|
Yen in millions
|
|||||||||||||||||||
|
Fiscal year ended March 31, 2019
|
|||||||||||||||||||
|
Employee
termination benefits |
|
Other
associated
costs
*
|
|
Total net
restructuring charges |
|
Depreciation
associated with restructured assets |
|
Total
|
|
||||||||||
Game & Network Services
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||
Music
|
2,991
|
201
|
3,192
|
—
|
3,192
|
|||||||||||||||
Pictures
|
4,795
|
—
|
4,795
|
—
|
4,795
|
|||||||||||||||
Electronics Products & Solutions
|
11,437
|
4,574
|
16,011
|
86
|
16,097
|
|||||||||||||||
Imaging & Sensing Solutions
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||
Financial Services
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||
All Other and Corporate
|
5,226
|
3,781
|
9,007
|
—
|
9,007
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total
|
24,449
|
8,556
|
33,005
|
86
|
33,091
|
|||||||||||||||
|
Yen in millions
|
|||||||||||||||||||
|
Fiscal year ended March 31, 2020
|
|||||||||||||||||||
|
Employee
termination benefits |
|
Other
associated
costs
*
|
|
Total net
restructuring charges |
|
Depreciation
associated with restructured assets |
|
Total
|
|
||||||||||
Game & Network Services
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||
Music
|
3,179
|
6
|
3,185
|
—
|
3,185
|
|||||||||||||||
Pictures
|
545
|
—
|
545
|
—
|
545
|
|||||||||||||||
Electronics Products & Solutions
|
14,500
|
227
|
14,727
|
—
|
14,727
|
|||||||||||||||
Imaging & Sensing Solutions
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||
Financial Services
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||
All Other and Corporate
|
4,733
|
1,520
|
6,253
|
256
|
6,509
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total
|
22,957
|
1,753
|
24,710
|
256
|
24,966
|
|||||||||||||||
* |
Other associated costs includes
non-cash
write-downs and disposals, net
|
21.
|
Supplemental consolidated statements of income information
|
(1)
|
Other operating (income) expense, net
|
|
Yen in millions
|
|||||||||||
|
March 31
|
|||||||||||
|
2018
|
|
2019
|
|
2020
|
|
||||||
Gain on sale of Sony City Osaki
*1
|
(4,914
|
) |
—
|
—
|
||||||||
Gain on remeasurement of EMI shares
*2
|
—
|
(116,939
|
) |
—
|
||||||||
Gain on remeasurement and sale of SRE shares
*3
|
—
|
—
|
(17,266
|
) | ||||||||
Gain on remeasurement of AEGON Sony Life Insurance Co., Ltd. and SA Reinsurance Ltd. shares
*4
|
—
|
—
|
(1,827
|
) | ||||||||
(Gain) loss on purchase/sale of interests in subsidiaries and affiliates, net
*5
|
(29,613
|
) |
(1,557
|
) |
(12,801
|
) | ||||||
(Gain) loss on sale, disposal or impairment of assets, net
*6
|
38,599
|
46,928
|
29,778
|
|||||||||
Other
|
—
|
—
|
(1,495
|
) | ||||||||
|
|
|
|
|
|
|||||||
|
4,072
|
(71,568
|
) |
(3,611
|
) | |||||||
*1 | A portion of gain on sale and leaseback transactions is deferred and is amortized on a straight-line basis over the lease term. |
*2 | Refer to Notes 5 and 25. |
*3 | Refer to Note 5. |
*4 | Refer to Notes 5 and 25. |
*5 | Refer to Notes 25 and 26. |
*6 | Refer to Notes 9, 13, 20 and 26. |
(2)
|
Research and development costs
|
(3)
|
Advertising costs
|
(4)
|
Shipping and handling costs
|
22.
|
Income taxes
|
|
Yen in millions
|
|||||||||||
|
Fiscal year ended March 31
|
|||||||||||
|
2018
|
|
2019
|
|
2020
|
|
||||||
Income before income taxes:
|
|
|
|
|||||||||
Sony Corporation and all subsidiaries in Japan
|
436,494
|
310,020
|
466,253
|
|||||||||
Foreign subsidiaries
|
262,555
|
701,628
|
333,197
|
|||||||||
|
|
|
|
|
|
|||||||
|
699,049
|
1,011,648
|
799,450
|
|||||||||
Income taxes—Current:
|
|
|
|
|||||||||
Sony Corporation and all subsidiaries in Japan
|
69,697
|
82,081
|
105,755
|
|||||||||
Foreign subsidiaries
|
57,988
|
84,667
|
66,636
|
|||||||||
|
|
|
|
|
|
|||||||
|
127,685
|
166,748
|
172,391
|
|||||||||
Income taxes—Deferred:
|
|
|
|
|||||||||
Sony Corporation and all subsidiaries in Japan
|
29,640
|
17,907
|
9,421
|
|||||||||
Foreign subsidiaries
|
(5,555
|
) |
(139,557
|
) |
(4,622
|
) | ||||||
|
|
|
|
|
|
|||||||
|
24,085
|
(121,650
|
) |
4,799
|
||||||||
|
|
|
|
|
|
|||||||
Total income tax expense
|
151,770
|
45,098
|
177,190
|
|||||||||
|
Fiscal year ended March 31
|
|||||||||||
|
2018
|
|
2019
|
|
2020
|
|
||||||
Statutory tax rate
|
31.5
|
% |
31.5
|
% |
31.5
|
% | ||||||
Non-deductible
expenses
|
0.8
|
0.7
|
0.3
|
|||||||||
Income tax credits
|
(0.6
|
) |
(1.6
|
) |
(1.7
|
) | ||||||
Change in statutory tax rate and law
|
(1.2
|
) |
(0.3
|
) |
(0.4
|
) | ||||||
Change in valuation allowances (other than the 2019 reversal of Sony Americas Holding Inc. (“SAHI”) and its U.S. consolidated tax filing group below)
|
(5.2
|
) |
2.3
|
(8.1
|
) | |||||||
The 2019 reversal of valuation allowances of SAHI and its U.S. consolidated tax filing group
|
—
|
(15.3
|
) |
—
|
||||||||
Change in deferred tax liabilities on undistributed earnings of foreign subsidiaries and corporate joint ventures
|
(0.8
|
) |
(0.1
|
) |
0.2
|
|||||||
Lower tax rate applied to life and
non-life
insurance business in Japan
|
(0.8
|
) |
(0.5
|
) |
(0.6
|
) | ||||||
Foreign income tax differential
|
(2.6
|
) |
(6.4
|
) |
(2.4
|
) | ||||||
Adjustments to tax reserves
|
(0.8
|
) |
(0.3
|
) |
0.9
|
|||||||
Effect of equity in net income of affiliated companies
|
0.0
|
0.0
|
0.0
|
|||||||||
The remeasurement gain for the equity interest in EMI
|
—
|
(2.4
|
) |
—
|
||||||||
Japan controlled foreign company taxation
|
—
|
0.0
|
5.3
|
|||||||||
Other
|
1.4
|
(3.1
|
) |
(2.8
|
) | |||||||
|
|
|
|
|
|
|||||||
Effective income tax rate
|
21.7
|
% |
4.5
|
% |
22.2
|
% | ||||||
|
Yen in millions
|
|||||||
|
March 31
|
|||||||
|
2019
|
|
2020
|
|
||||
Deferred tax assets:
|
|
|
||||||
Operating loss carryforwards for tax purposes
|
413,494
|
348,714
|
||||||
Accrued pension and severance costs
|
103,652
|
77,559
|
||||||
Amortization including film costs
|
86,196
|
65,349
|
||||||
Lease liability
|
|
|
—
|
|
|
|
100,720
|
|
Warranty reserves and accrued expenses
|
108,515
|
116,234
|
||||||
Future insurance policy benefits
|
36,683
|
42,056
|
||||||
Inventory
|
19,716
|
15,512
|
||||||
Depreciation
|
34,638
|
39,085
|
||||||
Tax credit carryforwards
|
117,471
|
94,900
|
||||||
Loss on equity securities
|
|
|
—
|
|
|
|
11,815
|
|
Reserve for doubtful accounts
|
9,136
|
9,090
|
||||||
Impairment of investments
|
12,278
|
6,029
|
||||||
Deferred revenue
|
19,081
|
24,420
|
||||||
Other
|
169,897
|
122,591
|
||||||
|
|
|||||||
Gross deferred tax assets
|
1,130,757
|
1,074,074
|
||||||
Less: Valuation allowance
|
(723,114
|
) |
(608,243
|
) | ||||
|
|
|||||||
Total deferred tax assets
|
407,643
|
465,831
|
||||||
|
|
|||||||
Deferred tax liabilities:
|
|
|
||||||
Insurance acquisition costs
|
(169,244
|
) |
(170,868
|
) | ||||
Future insurance policy benefits
|
(181,052
|
) |
(193,315
|
) | ||||
Unbilled accounts receivable in the Pictures segment
|
(44,842
|
) |
(26,214
|
) | ||||
Right-of-use assets
|
|
|
—
|
|
|
|
(96,970
|
)
|
Unrealized gains on securities
|
(75,573
|
) |
(92,791
|
) | ||||
Gain on equity securities
|
(33,082
|
) |
—
|
|||||
Intangible assets acquired through stock exchange offerings
|
(23,949
|
) |
(23,949
|
) | ||||
Intangible assets derived from EMI Music Publishing acquisition
|
(93,979
|
) |
(89,909
|
) | ||||
Undistributed earnings of foreign subsidiaries and corporate joint ventures
|
(15,758
|
) |
(25,359
|
) | ||||
Investment in M3
|
(37,007
|
) |
(38,303
|
) | ||||
Other
|
(62,092
|
) |
(47,319
|
) | ||||
|
|
|||||||
Gross deferred tax liabilities
|
(736,578
|
) |
(804,997
|
) | ||||
|
|
|||||||
Net deferred tax liabilities
|
(328,935
|
) |
(339,166
|
) | ||||
|
Yen in millions
|
|||||||||||
|
March 31
|
|||||||||||
|
2018
|
|
2019
|
|
2020
|
|
||||||
Balance at beginning of the fiscal year
|
119,529
|
95,425
|
50,577
|
|||||||||
Reductions for tax positions of prior years
|
(8,809
|
) |
(31,396
|
) |
(331
|
) | ||||||
Additions for tax positions of prior years
|
4,681
|
3,094
|
162
|
|||||||||
Additions based on tax positions related to the current year
|
5,740
|
2,594
|
8,074
|
|||||||||
Settlements
|
(21,893
|
) |
(4,235
|
) |
(13,240
|
) | ||||||
Lapse in statute of limitations
|
(3,469
|
) |
(14,824
|
) |
(1,251
|
) | ||||||
Foreign currency translation adjustments
|
(354
|
) |
(81
|
) |
(2,723
|
) | ||||||
|
|
|
|
|
|
|||||||
Balance at end of the fiscal year
|
95,425
|
50,577
|
41,268
|
|||||||||
Total net amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate
|
39,308
|
35,004
|
29,539
|
23.
|
Reconciliation of the differences between basic and diluted EPS
|
|
Yen in millions
|
|||||||||||
|
Fiscal year ended March 31
|
|||||||||||
|
2018
|
|
2019
|
|
2020
|
|
||||||
Net income attributable to Sony Corporation’s stockholders for basic and diluted EPS computation
|
490,794
|
916,271
|
582,191
|
|||||||||
|
Thousands of shares
|
|||||||||||
Weighted-average shares outstanding
|
1,263,895
|
1,266,592
|
1,234,408
|
|||||||||
Effect of dilutive securities:
|
|
|
|
|||||||||
Stock acquisition rights
|
4,565
|
4,088
|
3,853
|
|||||||||
Zero coupon convertible bonds
|
23,960
|
23,966
|
23,994
|
|||||||||
|
|
|||||||||||
Weighted-average shares for diluted EPS computation
|
1,292,420
|
1,294,646
|
1,262,255
|
|||||||||
|
Yen
|
|||||||||||
Basic EPS
|
388.32
|
723.41
|
471.64
|
|||||||||
Diluted EPS
|
379.75
|
707.74
|
461.23
|
|||||||||
24.
|
Variable interest entities
|
(1
)
|
Consolidated VIEs
|
(2)
|
Unconsolidated VIEs
|
|
|
Yen in millions
|
|
|||||||||||||
|
|
March 31, 2019
|
|
|||||||||||||
|
|
Presentation in the consolidated balance
sheets |
|
|
Maximum
exposure to loss |
|
||||||||||
|
|
Marketable
securities
|
|
|
Securities
investments
and other
|
|
|
Prepaid
expenses and
other current
assets
|
|
|||||||
Equity securities
*1
|
|
|
135,552
|
|
|
|
8,485
|
|
|
|
—
|
|
|
|
146,031
|
|
Securitized products
|
|
|
—
|
|
|
|
191,049
|
|
|
|
—
|
|
|
|
195,190
|
|
Foreign corporate bonds
*2
|
|
|
29,889
|
|
|
|
65,503
|
|
|
|
—
|
|
|
|
95,392
|
|
Other investments
|
|
|
—
|
|
|
|
4,688
|
|
|
|
21,000
|
|
|
|
25,688
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
165,441
|
|
|
|
269,725
|
|
|
|
21,000
|
|
|
|
462,301
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yen in millions
|
|
|||||||||||||
|
|
March 31, 2020
|
|
|||||||||||||
|
|
Presentation in the consolidated balance
sheets |
|
|
Maximum
exposure to loss |
|
||||||||||
|
|
Marketable
securities
|
|
|
Securities
investments
and other
|
|
|
Prepaid
expenses and
other current
assets
|
|
|||||||
Equity securities
*1
|
|
|
579,773
|
|
|
|
6,229
|
|
|
|
—
|
|
|
|
587,602
|
|
Securitized products
|
|
|
—
|
|
|
|
210,641
|
|
|
|
—
|
|
|
|
210,641
|
|
Foreign corporate bonds
*2
|
|
|
41,452
|
|
|
|
41,036
|
|
|
|
—
|
|
|
|
82,488
|
|
Other investments
|
|
|
—
|
|
|
|
16,253
|
|
|
|
21,000
|
|
|
|
43,719
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
621,225
|
|
|
|
274,159
|
|
|
|
21,000
|
|
|
|
924,450
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*1
|
Equity securities include Investment funds.
|
*2
|
Foreign corporate bonds include repackaged bonds.
|
25.
|
Acquisitions
|
(1)
|
EMI Music Publishing acquisition
|
|
Yen in millions
|
|||||||||||
|
Acquired assets
and liabilities recorded at fair value as of acquisition date
(Preliminary)
|
|
Measurement
period adjustments |
|
Acquired assets
and liabilities recorded at fair value as of acquisition date
(Final)
|
|
||||||
Cash and cash equivalents
|
12,971
|
|
12,971
|
|||||||||
Notes and accounts receivable, trade and contract assets
|
32,287
|
|
32,287
|
|||||||||
Prepaid expenses and other current assets
|
10,220
|
(98
|
) |
10,122
|
||||||||
Securities investments and other
|
1,476
|
|
1,476
|
|||||||||
Intangibles, net
|
420,534
|
|
420,534
|
|||||||||
Goodwill
|
237,271
|
(1,206
|
) |
236,065
|
||||||||
Other
|
10,023
|
|
10,023
|
|||||||||
|
|
|
|
|
|
|||||||
Total assets
|
724,782
|
(1,304
|
) |
723,478
|
||||||||
|
|
|
|
|
|
|||||||
Notes and accounts payable, trade
|
1,731
|
|
1,731
|
|||||||||
Accounts payable, other and accrued expenses
|
70,675
|
|
70,675
|
|||||||||
Accrued income and other taxes
|
3,082
|
(69
|
) |
3,013
|
||||||||
Long-term debt
|
148,621
|
|
148,621
|
|||||||||
Accrued pension and severance costs
|
1,947
|
|
1,947
|
|||||||||
Deferred income taxes
|
94,849
|
(1,235
|
) |
93,614
|
||||||||
Other
|
5,564
|
|
5,564
|
|||||||||
|
|
|
|
|
|
|||||||
Total liabilities
|
326,469
|
(1,304
|
) |
325,165
|
||||||||
|
|
|
|
|
|
|
Yen in millions,
Yen per share amounts
|
|||||||
|
Fiscal year ended March 31
|
|||||||
|
2018
|
|
2019
|
|
||||
Net sales
|
8,612,280
|
8,738,209
|
||||||
Operating income
|
854,786
|
801,973
|
||||||
Net income attributable to Sony Corporation’s stockholders
|
584,019
|
817,629
|
||||||
Per share data:
|
|
|
||||||
— Basic EPS
|
462.08
|
645.53
|
||||||
— Diluted EPS
|
451.88
|
631.55
|
(2)
|
Insomniac Games, Inc. acquisition
|
(3)
|
Silvergate Media acquisition
|
(4)
|
Acquisition of equity interests in joint ventures in the life insurance business
|
|
Yen in millions
|
|
||
Cash and cash equivalents
|
27,380
|
|||
Marketable securities
|
530,851
|
|||
Prepaid expenses and other current assets
|
21,933
|
|||
Securities investments and other
|
15,329
|
|||
Goodwill
|
3,609
|
|||
Other
|
406
|
|||
|
|
|||
Total assets
|
599,508
|
|||
|
|
|||
Future insurance policy benefits and other
|
66,599
|
|||
Policyholders’ account in the life insurance business
|
495,248
|
|||
Other
|
4,979
|
|||
|
|
|||
Total liabilities
|
566,826
|
|||
|
|
(5)
|
Other acquisitions
|
26.
|
Divestitures
|
27.
|
Collaborative arrangements
|
28.
|
Commitments, contingent liabilities and other
|
(1)
|
Loan commitments
|
(2)
|
Purchase commitments and other
|
Fiscal year ending March 31
|
Yen in millions
|
|
||
2021
|
378,319
|
|||
2022
|
103,033
|
|||
2023
|
76,541
|
|||
2024
|
49,549
|
|||
2025
|
36,936
|
|||
Later fiscal years
|
40,533
|
|||
|
|
|||
Total
|
684,911
|
|||
(3)
|
Litigation
|
(4)
|
Guarantees
|
|
Yen in millions
|
|||||||||||
|
Fiscal year ended March 31
|
|||||||||||
|
2018
|
|
2019
|
|
2020
|
|
||||||
Balance at beginning of the fiscal year
|
57,694
|
44,717
|
33,005
|
|||||||||
Additional liabilities for warranties
|
32,179
|
23,041
|
21,448
|
|||||||||
Settlements (in cash or in kind)
|
(30,570
|
) |
(26,326
|
) |
(21,491
|
) | ||||||
Changes in estimate for
pre-existing
warranty reserve
|
(16,802
|
) |
(7,370
|
) |
(562
|
) | ||||||
Translation adjustments
|
2,216
|
(1,057
|
) |
(593
|
) | |||||||
|
|
|
|
|
|
|||||||
Balance at end of the fiscal year
|
44,717
|
33,005
|
31,807
|
|||||||||
29.
|
Business segment information
|
|
Yen in millions
|
|||||||||||
|
Fiscal year ended March 31
|
|||||||||||
|
2018
|
|
2019
|
|
2020
|
|
||||||
Sales and operating revenue:
|
|
|
|
|||||||||
Game & Network Services —
|
|
|
|
|||||||||
Customers
|
1,848,298
|
2,224,622
|
1,919,760
|
|||||||||
Intersegment
|
95,514
|
86,250
|
57,791
|
|||||||||
|
|
|
|
|
|
|||||||
Total
|
1,943,812
|
2,310,872
|
1,977,551
|
|||||||||
Music —
|
|
|
|
|||||||||
Customers
|
784,792
|
795,025
|
838,592
|
|||||||||
Intersegment
|
15,203
|
12,464
|
11,317
|
|||||||||
|
|
|
|
|
|
|||||||
Total
|
799,995
|
807,489
|
849,909
|
|||||||||
Pictures —
|
|
|
|
|||||||||
Customers
|
1,010,173
|
985,270
|
1,010,714
|
|||||||||
Intersegment
|
894
|
1,603
|
1,140
|
|||||||||
|
|
|
|
|
|
|||||||
Total
|
1,011,067
|
986,873
|
1,011,854
|
|||||||||
Electronics Products & Solutions —
|
|
|
|
|||||||||
Customers
|
2,582,813
|
2,303,167
|
1,969,880
|
|||||||||
Intersegment
|
17,542
|
17,461
|
21,388
|
|||||||||
|
|
|
|
|
|
|||||||
Total
|
2,600,355
|
2,320,628
|
1,991,268
|
|||||||||
Imaging & Sensing Solutions —
|
|
|
|
|||||||||
Customers
|
726,892
|
770,622
|
985,259
|
|||||||||
Intersegment
|
123,118
|
108,708
|
85,317
|
|||||||||
|
|
|
|
|
|
|||||||
Total
|
850,010
|
879,330
|
1,070,576
|
|||||||||
Financial Services —
|
|
|
|
|||||||||
Customers
|
1,221,235
|
1,274,708
|
1,299,847
|
|||||||||
Intersegment
|
7,142
|
7,831
|
7,901
|
|||||||||
|
|
|
|
|
|
|||||||
Total
|
1,228,377
|
1,282,539
|
1,307,748
|
|||||||||
All Other —
|
|
|
|
|||||||||
Customers
|
351,527
|
299,806
|
214,999
|
|||||||||
Intersegment
|
55,647
|
45,931
|
36,421
|
|||||||||
|
|
|
|
|
|
|||||||
Total
|
407,174
|
345,737
|
251,420
|
|||||||||
Corporate and elimination
|
(296,808
|
) |
(267,781
|
) |
(200,441
|
) | ||||||
|
|
|
|
|
|
|||||||
Consolidated total
|
8,543,982
|
8,665,687
|
8,259,885
|
|||||||||
|
Yen in millions
|
|||||||||||
|
Fiscal year ended March 31
|
|||||||||||
|
2018
|
|
2019
|
|
2020
|
|
||||||
Operating income (loss):
|
|
|
|
|||||||||
Game & Network Services
|
177,478
|
311,092
|
238,400
|
|||||||||
Music
|
127,786
|
232,487
|
142,345
|
|||||||||
Pictures
|
41,110
|
54,599
|
68,157
|
|||||||||
Electronics Products & Solutions
|
133,129
|
76,508
|
87,276
|
|||||||||
Imaging & Sensing Solutions
|
164,023
|
143,874
|
235,584
|
|||||||||
Financial Services
|
178,947
|
161,477
|
129,597
|
|||||||||
All Other
|
(23,530
|
) |
(11,127
|
) |
16,288
|
|||||||
|
|
|
|
|
|
|||||||
Total
|
798,943
|
968,910
|
917,647
|
|||||||||
Corporate and elimination
|
(64,083
|
) |
(74,675
|
) |
(72,188
|
) | ||||||
|
|
|
|
|
|
|||||||
Consolidated operating income
|
734,860
|
894,235
|
845,459
|
|||||||||
Other income
|
23,728
|
144,735
|
21,949
|
|||||||||
Other expenses
|
(59,539
|
) |
(27,322
|
) |
(67,958
|
) | ||||||
|
|
|
|
|
|
|||||||
Consolidated income before income taxes
|
699,049
|
1,011,648
|
799,450
|
|||||||||
|
Yen in millions
|
|||||||||||
|
Fiscal year ended March 31
|
|||||||||||
|
2018
|
|
2019
|
|
2020
|
|
||||||
Equity in net income (loss) of affiliated companies:
|
|
|
|
|||||||||
Game & Network Services
|
—
|
—
|
—
|
|||||||||
Music
|
4,483
|
(6,915
|
) |
4,239
|
||||||||
Pictures
|
(129
|
) |
106
|
(629
|
) | |||||||
Electronics Products & Solutions
|
(102
|
) |
(38
|
) |
136
|
|||||||
Imaging & Sensing Solutions
|
—
|
—
|
0
|
|||||||||
Financial Services
|
(61
|
) |
(682
|
) |
(104
|
) | ||||||
All Other
|
4,378
|
4,530
|
5,995
|
|||||||||
|
|
|
|
|
|
|||||||
Consolidated total
|
8,569
|
(2,999
|
) |
9,637
|
||||||||
Depreciation and amortization:
|
|
|
|
|||||||||
Game & Network Services
|
29,091
|
29,023
|
29,135
|
|||||||||
Music
|
18,230
|
21,259
|
29,137
|
|||||||||
Pictures
|
24,458
|
24,081
|
21,665
|
|||||||||
Electronics Products & Solutions
|
64,279
|
61,749
|
63,291
|
|||||||||
Imaging & Sensing Solutions
|
99,258
|
110,746
|
134,035
|
|||||||||
Financial Services, including deferred insurance acquisition costs
|
79,843
|
91,179
|
106,667
|
|||||||||
All Other
|
5,910
|
4,940
|
5,095
|
|||||||||
|
|
|
|
|
|
|||||||
Total
|
321,069
|
342,977
|
389,025
|
|||||||||
Corporate
|
40,375
|
31,049
|
27,617
|
|||||||||
|
|
|
|
|
|
|||||||
Consolidated total
|
361,444
|
374,026
|
416,642
|
|||||||||
|
Yen in millions
|
|||||||||||
|
Fiscal year ended March 31
|
|||||||||||
|
2018
|
|
2019
|
|
2020
|
|
||||||
Sales and operating revenue:
|
|
|
|
|||||||||
Game & Network Services
|
|
|
|
|||||||||
Digital Software and
Add-on
Content
|
762,220
|
1,102,231
|
1,010,296
|
|||||||||
Network Services
|
270,972
|
326,524
|
337,265
|
|||||||||
Hardware and Others
|
815,106
|
795,867
|
572,199
|
|||||||||
|
|
|
|
|
|
|||||||
Total
|
1,848,298
|
2,224,622
|
1,919,760
|
|||||||||
Music
|
|
|
|
|||||||||
Recorded Music — Streaming
|
197,439
|
227,513
|
276,039
|
|||||||||
Recorded Music — Others
|
249,521
|
199,413
|
191,114
|
|||||||||
Music Publishing
|
74,360
|
106,666
|
157,478
|
|||||||||
Visual Media and Platform
|
263,472
|
261,433
|
213,961
|
|||||||||
|
|
|
|
|
|
|||||||
Total
|
784,792
|
795,025
|
838,592
|
|||||||||
Pictures
|
|
|
|
|||||||||
Motion Pictures
|
448,945
|
436,017
|
475,061
|
|||||||||
Television Productions
|
289,024
|
288,816
|
301,224
|
|||||||||
Media Networks
|
272,204
|
260,437
|
234,429
|
|||||||||
|
|
|
|
|
|
|||||||
Total
|
1,010,173
|
985,270
|
1,010,714
|
|||||||||
Electronics Products & Solutions
|
|
|
|
|||||||||
Televisions
|
861,763
|
788,423
|
646,513
|
|||||||||
Audio and Video
|
357,194
|
362,580
|
346,060
|
|||||||||
Still and Video Cameras
|
415,318
|
421,506
|
384,142
|
|||||||||
Mobile Communications
|
713,916
|
487,330
|
362,144
|
|||||||||
Other
|
234,622
|
243,328
|
231,021
|
|||||||||
|
|
|
|
|
|
|||||||
Total
|
2,582,813
|
2,303,167
|
1,969,880
|
|||||||||
Imaging & Sensing Solutions
|
726,892
|
770,622
|
985,259
|
|||||||||
Financial Services
|
1,221,235
|
1,274,708
|
1,299,847
|
|||||||||
All Other
|
351,527
|
299,806
|
214,999
|
|||||||||
Corporate
|
18,252
|
12,467
|
20,834
|
|||||||||
|
|
|
|
|
|
|||||||
Consolidated total
|
8,543,982
|
8,665,687
|
8,259,885
|
|||||||||
|
Yen in millions
|
|||||||||||
|
Fiscal year ended March 31
|
|||||||||||
|
2018
|
|
2019
|
|
2020
|
|
||||||
Sales and operating revenue:
|
|
|
|
|||||||||
Japan
|
2,625,619
|
2,591,784
|
2,472,479
|
|||||||||
United States
|
1,835,705
|
1,982,135
|
1,864,390
|
|||||||||
Europe
|
1,841,457
|
1,862,166
|
1,697,791
|
|||||||||
China
|
674,718
|
770,416
|
845,235
|
|||||||||
Asia-Pacific
|
1,024,179
|
912,193
|
892,026
|
|||||||||
Other Areas
|
542,304
|
546,993
|
487,964
|
|||||||||
|
|
|
|
|
|
|||||||
Total
|
8,543,982
|
8,665,687
|
8,259,885
|
|||||||||
|
Yen in millions
|
|||||||
|
March 31
|
|||||||
|
2019
|
|
2020
|
|
||||
Property, plant and equipment, net and right-of-use assets*:
|
|
|
||||||
Japan
|
590,694
|
946,922
|
||||||
United States
|
113,581
|
214,226
|
||||||
Europe
|
22,622
|
67,799
|
||||||
China
|
11,694
|
17,996
|
||||||
Asia-Pacific
|
34,273
|
46,932
|
||||||
Other Areas
|
4,189
|
7,379
|
||||||
|
|
|
|
|||||
Total
|
777,053
|
1,301,254
|
||||||
*
|
As of March 31, 2020, the amounts include operating lease right-of-use assets, which were recognized from April 1, 2019 onward as a result of the adoption of ASU 2016-02.
|
(1) Europe:
|
|
United Kingdom, France, Germany, Russia, Spain and Sweden
|
(2) Asia-Pacific:
|
|
India, South Korea, Oceania, Thailand and Malaysia
|
(3) Other Areas:
|
|
The Middle East/Africa, Brazil, Mexico and Canada
|
30.
|
Subsequent events
|
1.
|
Shares and Stock Acquisition Rights to be purchased: Common shares (excluding SFH’s common shares owned by Sony Corporation and the treasury shares owned by SFH) and the related stock acquisition rights
|
2.
|
Period: From May 20, 2020 through July 13, 2020
|
3.
|
Price: 2,600 yen per common share
|
4.
|
Number of Shares to be purchased (including the number of shares subject to stock acquisition rights):
|
|
Yen in millions
|
|||||||||||||||||||||||
|
Balance
at beginning of period |
|
Beginning
adjustment
(Note 3)
|
|
Additions
charged to costs and expenses |
|
Deductions
(Note 1) |
|
Other
(Note 2) |
|
Balance
at end
of period
|
|
||||||||||||
Fiscal year ended March 31, 2018:
|
|
|
|
|
|
|
||||||||||||||||||
Allowance for doubtful accounts and sales returns
|
53,150
|
—
|
45,515
|
(51,302
|
) |
1,300
|
48,663
|
|||||||||||||||||
Fiscal year ended March 31, 2019:
|
|
|
|
|
|
|
||||||||||||||||||
Allowance for doubtful accounts
|
48,663
|
(25,114
|
) |
7,112
|
(5,532
|
) |
311
|
25,440
|
||||||||||||||||
Fiscal year ended March 31, 2020:
|
|
|
|
|
|
|
||||||||||||||||||
Allowance for doubtful accounts
|
25,440
|
—
|
9,006
|
(6,908
|
) |
(1,665
|
) |
25,873
|
||||||||||||||||
1. | Reversal including amounts written off. |
2. | Translation adjustments. |
3. | Sony adopted ASU 2014-09 from April 1, 2018, and as a result, sales returns are presented as a liability instead of as a contra-asset allowance. Accordingly, Sony changed the presentation from “Allowance for doubtful accounts and sales returns” to “Allowance for doubtful accounts” for the fiscal years ended March 31, 2019 and 2020. |
|
Yen in millions
|
|||||||||||||||||||
|
Balance
at beginning of period |
|
Additions
|
|
Deductions
|
|
Other
(Note 1) |
|
Balance
at end
of period
|
|
||||||||||
Fiscal year ended March 31, 2018:
|
|
|
|
|
|
|||||||||||||||
Valuation allowance — Deferred tax assets
|
1,051,964
|
70,797
|
(123,597
|
) |
(99,329
|
) |
899,835
|
|||||||||||||
Fiscal year ended March 31, 2019:
|
|
|
|
|
|
|||||||||||||||
Valuation allowance — Deferred tax assets
|
899,835
|
116,938
|
(309,226
|
) |
15,567
|
723,114
|
||||||||||||||
Fiscal year ended March 31, 2020:
|
|
|
|
|
|
|||||||||||||||
Valuation allowance — Deferred tax assets
|
723,114
|
53,245
|
(161,547
|
) |
(6,569
|
) |
608,243
|
|||||||||||||
1. | Translation adjustments and the effect of change in statutory tax rate. |
Enacted: |
April 19, 1946 | |||
Amended: |
August 3, 1946 | June 29, 1962 | ||
November 20, 1946 | December 27, 1962 | |||
May 27, 1947 | December 27, 1966 | |||
June 30, 1947 | December 26, 1970 | |||
November 22, 1947 | June 29, 1971 | |||
May 3, 1948 | June 29, 1972 | |||
August 30, 1948 | December 26, 1974 | |||
March 4, 1950 | January 30, 1976 | |||
May 27, 1950 | January 28, 1982 | |||
November 25, 1950 | January 28, 1983 | |||
June 23, 1951 | January 30, 1987 | |||
November 30, 1951 | June 27, 1991 | |||
February 10, 1953 | June 29, 1994 | |||
June 26, 1954 | June 27, 1997 | |||
June 25, 1955 | June 26, 1998 | |||
June 25, 1956 | June 29, 1999 | |||
December 24, 1956 | June 29, 2000 | |||
June 24, 1957 | January 25, 2001 | |||
December 25, 1957 | June 20, 2002 | |||
December 23, 1958 | June 20, 2003 | |||
June 30, 1959 | June 22, 2004 | |||
December 26, 1959 | June 22, 2005 | |||
June 25, 1960 | June 22, 2006 | |||
June 5, 1961 | June 19, 2009 | |||
June 29, 1961 | June 23, 2015 | |||
December 26, 1961 | June 26, 2020 |
(TRANSLATION)
ARTICLES OF INCORPORATION
OF
SONY CORPORATION
(Sony Kabushiki Kaisha)
CHAPTER I
GENERAL PROVISIONS
Article 1. (Trade Name)
The name of the Corporation shall be Sony Group Kabushiki Kaisha and in English translation it shall be SONY GROUP CORPORATION.
Article 2. (Company with Three Committees)
The Corporation, being a company with three committees, shall have the Board of Directors, Committees (Nominating Committee, Audit Committee and Compensation Committee) and Accounting Auditors.
Article 3. (Location of the Head Office)
The head office of the Corporation shall be located at Minato-ku, Tokyo, Japan.
Article 4. (Purpose)
The purpose of the Corporation shall be to engage in the following business activities:
(1) |
Manufacture and sale of electronic and electrical machines and equipment; |
(2) |
Manufacture and sale of medical instruments, optical instruments and other equipment, machines and instruments; |
(3) |
Planning, production and sale of audio-visual software; |
(4) |
Planning, production and sale of computer software programs; |
(5) |
Manufacture and sale of metal industrial products, chemical industrial products and ceramic industrial products; |
(6) |
Manufacture and sale of textile products, paper products and wood-crafted articles, daily necessities, foodstuffs and toys; |
(7) |
Manufacture and sale of transportation machines and equipment and petroleum and coal products; |
(8) |
Real estate activities, construction business, transportation business and warehousing business; |
(9) |
Publishing business and printing business; |
(10) |
Advertising agency business, insurance agency business, broadcasting enterprise, recreation business, such as travel, management of sporting facilities, etc. and other service enterprises; |
(11) |
Financial business; |
(12) |
Type I and Type II telecommunications business under the Telecommunications Business Law; |
(13) |
Investing in stocks and bonds, etc.; |
(14) |
Manufacture, sale, export and import of products which are incidental to or related to those mentioned in the preceding items; |
(15) |
Rendering of services related to those mentioned in the preceding items; |
1
(16) |
Investment in businesses mentioned in the preceding items operated by other companies or persons; and |
(17) |
All businesses which are incidental to or related to those mentioned in the preceding items. |
Article 5. (Method of Public Notice)
The method of public notices of the Corporation shall be electronic public notices; provided, however, that if the Corporation is unable to give an electronic public notice because of an accident or any other unavoidable reason, public notices of the Corporation may be given in the Nihon Keizai Shimbun.
CHAPTER II
SHARES
Article 6. (Total Number of Shares Authorized to be Issued)
The total number of shares authorized to be issued by the Corporation shall be three billion six hundred million (3,600,000,000) shares.
Article 7. (Number of Shares Constituting One Full Unit of Stock)
The number of shares constituting one full unit of stock shall be one hundred (100).
Article 8. (Request for the Sale of Shares Constituting Less Than One Full Unit)
A shareholder holding shares constituting less than one full unit may request the Corporation to sell to the shareholder such amount of shares which will, when added together with the shares constituting less than one full unit, constitute one full unit of stock.
Article 9. (Transfer Agent)
1. The Corporation shall appoint a transfer agent. The transfer agent and its handling office shall be designated by a resolution of the Board of Directors of the Corporation or a determination of the Corporate Executive Officer to whom the determination has been delegated by a resolution of the Board of Directors of the Corporation and public notice thereof shall be given by the Corporation.
2. The register of shareholders and the register of stock acquisition rights of the Corporation shall be kept at the handling office of the transfer agent. The Corporation shall cause the transfer agent to handle the business pertaining to shares and stock acquisition rights, such as entry (including digital entry; hereinafter the same interpretation being applicable) into the register of shareholders and the register of stock acquisition rights, and purchase and sale of shares constituting less than one full unit, etc. The Corporation itself shall not handle the above matters directly.
Article 10. (Share Handling Regulations)
The business pertaining to shares and stock acquisition rights of the Corporation shall be governed by, in addition to these Articles of Incorporation, the Share Handling Regulations adopted or amended by a resolution of the Board of Directors of the Corporation or the Corporate Executive Officer to whom the adoption or amendment has been delegated by a resolution of the Board of Directors of the Corporation.
CHAPTER III
GENERAL MEETINGS OF SHAREHOLDERS
Article 11. (Convocation)
The ordinary general meeting of shareholders shall be convened within three months after the end of each business year, and an extraordinary general meeting of shareholders may be convened whenever necessary in accordance with a resolution of the Board of Directors of the Corporation.
2
Article 12. (Record Date of Ordinary General Meetings of Shareholders)
The Corporation shall deem any shareholder having voting rights, as appearing on the register of shareholders as of the end of the business year, to be a shareholder who is entitled to exercise voting rights at the ordinary general meeting of shareholders for that business year.
Article 13. (Convocation of Meetings and Chairman)
The Director who is concurrently in office as a Corporate Executive Officer, as so determined in advance by a resolution of the Board of Directors of the Corporation, shall convene the general meetings of shareholders and act as the chairman thereof. When such Director is unable to act, another Director concurrently in office as a Corporate Executive Officer, who is designated in accordance with an order of priority determined in advance by a resolution of the Board of Directors of the Corporation, shall convene such general meetings and act as the chairman thereof.
Article |
14. (Disclosure of Reference Documents for General Meetings of Shareholders, Etc. through the Internet) |
Upon convening a general meeting of shareholders, it may be deemed that the Corporation has provided the shareholders with necessary information that should be described or indicated in the reference documents for the general meeting of shareholders, business reports, non-consolidated financial statements, and consolidated financial statements, on the condition that such information is disclosed through the Internet in accordance with the Ministry of Justice Ordinance.
Article 15. (Method of Adopting Resolutions)
1. Except as otherwise provided by law or by these Articles of Incorporation, all resolutions of a general meeting of shareholders shall be adopted by a majority of votes held by the attending shareholders entitled to exercise their voting rights.
2. Resolutions provided for in Article 309, Paragraph 2 of the Companies Act may be adopted by not less than two-thirds of the votes held by the attending shareholders who hold not less than one-third of the votes of shareholders entitled to exercise their voting rights.
Article 16. (Exercise of Voting Rights by Proxy)
When a shareholder or its legal representative is not able to attend a general meeting of shareholders personally, he may entrust his voting rights to an attending shareholder who has voting rights. However, a document evidencing the authority of a proxy must be filed with the Corporation.
Article 17. (Adjournment or Change of Location of the Meeting)
The chairman, in accordance with a resolution adopted at a general meeting of shareholders, may adjourn, or change the location of the meeting.
Article 18. (Minutes)
The substance of the proceedings at a general meeting of shareholders and the results thereof, as well as other matters provided for in laws and regulations, shall be recorded in the minutes, and the chairman, other Directors and Corporate Executive Officers present shall inscribe their names and affix their seals thereon or put their electronic signature thereon.
CHAPTER IV
DIRECTORS, BOARD OF DIRECTORS AND COMMITTEES
Article 19. (Election of Directors)
1. Directors shall be elected at the general meetings of shareholders.
2. In order to adopt a resolution for the election of Directors, the attendance of shareholders holding not less than one-third of the voting rights of shareholders entitled to exercise their voting rights shall be required.
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3. With respect to resolutions for the election of Directors, no cumulative voting shall be used.
Article 20. (Term of Office of Directors)
1. The term of office of a Director shall expire at the conclusion of the ordinary general meeting of shareholders held with respect to the last business year ending within one year after his or her election.
2. The term of office of a Director elected to fill a vacancy or to increase the number of Directors shall be the same as the remaining term of office of the other Directors then in office.
Article 21. (Limitation of Liabilities of Directors and Liability Limitation Agreement with Directors)
1. The Corporation may, by a resolution of the Board of Directors of the Corporation, exempt Directors from their liabilities provided for in Article 423, Paragraph 1 of the Companies Act, to the extent permitted by law.
2. The Corporation may enter into a liability limitation agreement with Directors (excluding Directors who execute business of the Corporation), which shall limit the maximum amount of their liabilities provided for in Article 423, Paragraph 1 of the Companies Act to the higher of either thirty million yen (30,000,000 yen) or an aggregate sum of the amounts prescribed in each item of Article 425, Paragraph 1 of the Companies Act.
Article 22. (Board of Directors)
1. The Directors of the Corporation shall constitute the Board of Directors of the Corporation.
2. The Board of Directors of the Corporation shall make decisions concerning the affairs of the Corporation as provided by law and by these Articles of Incorporation, as well as all other important affairs of the Corporation, and supervise the performance of the duties of the Directors and Corporate Executive Officers.
Article 23. (Holding of Meetings of the Board of Directors)
Meetings of the Board of Directors of the Corporation shall be either of ordinary or extraordinary meetings. Ordinary meetings of the Board of Directors of the Corporation shall be held at least once every three months, while extraordinary meetings of the Board of Directors of the Corporation shall be held whenever necessary.
Article 24. (Notice of Convocation of the Board of Directors)
Notice of a meeting of the Board of Directors of the Corporation, giving the date, location and agenda, shall be sent to each Director at least five days prior to the meeting; provided, however, that in case of urgency, such period may be shortened.
Article 25. (Method of Adopting Resolutions of the Board of Directors)
1. Resolutions of the Board of Directors of the Corporation shall be adopted by a majority of the Directors present, which present Directors shall constitute, in number, a majority of the total number of Directors entitled to vote.
2. Notwithstanding the preceding paragraph, in accordance with Article 370 of the Companies Act, the Corporation may deem that the matters to be resolved by the Board of Directors are adopted by a resolution of the Board of Directors when all the Directors unanimously express their agreement to such matters.
Article 26. (Minutes of the Board of Directors)
The substance of the proceedings of a meeting of the Board of Directors of the Corporation and the results thereof, as well as other matters provided for in laws and regulations, shall be recorded in the minutes, and the attending Directors shall inscribe their names and affix their seals thereon or put their electronic signatures thereon.
4
Article 27. (Nominating Committee, Audit Committee and Compensation Committee)
Each of the Nominating Committee, the Audit Committee and the Compensation Committee shall make decisions on the matters prescribed by law, and respectively shall exercise their power and authority which are required in performing their respective business.
Article 28. (Organization of Each Committee)
1. Each Committee shall consist of three (3) or more Directors, a majority of whom shall be outside Directors; provided, however, that a Director who is a member of the Audit Committee shall not concurrently be in office as a Corporate Executive Officer, a Director who operates the business, an Accounting Counselor (kaikeisanyo), a general manager (shihainin) or any other employee of the Corporation or any of its subsidiaries.
2. Directors who are to be members of any Committee shall be determined by a resolution of the Board of Directors of the Corporation.
CHAPTER V
CORPORATE EXECUTIVE OFFICERS
Article 29. (Election of Corporate Executive Officers)
Corporate Executive Officers shall be appointed by a resolution of the Board of Directors of the Corporation.
Article 30. (Term of Office of Corporate Executive Officers)
1. The term of office of a Corporate Executive Officer shall expire at the conclusion of the first meeting of the Board of Directors of the Corporation that is convened immediately after the conclusion of the ordinary general meeting of shareholders held with respect to the last business year ending within one year after his or her election.
2. The term of office of a Corporate Executive Officer elected to fill a vacancy or to increase the number of Corporate Executive Officers shall be the same as the remaining term of office of the other Corporate Executive Officers then in office.
Article 31. (Representative Corporate Executive Officers)
Corporate Executive Officers who shall represent the Corporation shall be appointed by a resolution of the Board of Directors of the Corporation.
Article 32. (Limitation of Liabilities of Corporate Executive Officers)
The Corporation may, by a resolution of the Board of Directors of the Corporation, exempt Corporate Executive Officers from their liabilities provided for in Article 423, Paragraph 1 of the Companies Act, to the extent permitted by law.
CHAPTER VI
ACCOUNTS
Article 33. (Business Year)
The business year of the Corporation shall commence on April 1 of each year and shall end on March 31 of the next following year.
Article 34. (Dividends from Surplus)
1. The Corporation may determine the matters provided for in each item of Article 459, Paragraph 1 of the Companies Act by a resolution of the Board of Directors without a resolution of a general meeting of shareholders.
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2. The Corporation may make distribution of surplus in cash (hereinafter referred to as the Dividends) to shareholders or registered share pledgees whose names appear on the register of shareholders as of the close of March 31 or September 30 of each year.
Article 35. (Expiration Period)
In case Dividends shall not be received within five (5) years after the due date of each payment, the Corporation shall be relieved of the obligation for the payment thereof. Dividends payable shall bear no interest.
Article 36. (Conversion of Convertible Debentures and Dividends)
1. With respect to the calculation of the first Dividends to be paid on shares issued upon conversion of convertible debentures, such conversion shall be deemed to have occurred at the beginning of the business year in which the conversion was applied for.
2. For purposes of applying the preceding paragraph, the period from April 1 to September 30 of the same year and the period from October 1 to March 31 of the next following year, shall be deemed business years, respectively.
CHAPTER VII
MISCELLANEOUS PROVISIONS
Article 37. (Transitional Measures for Limitation of Liabilities of Directors, Statutory Auditors and Corporate Executive Officers)
1. The Corporation may, by a resolution of the Board of Directors of the Corporation, exempt Directors from their liabilities arising in connection with the actions provided for in Article 266, Paragraph 1, Item 5 of the Commercial Code, not as amended (hereinafter referred to as the Old Commercial Code) by the Law for Maintenance, Etc. of Relevant Laws Relating to the Enforcement of the Companies Act (Law No. 87, 2005; hereinafter referred to as the Maintenance Law) that occurred prior to the close of the 86th ordinary general meeting of shareholders, to the extent permitted by law.
2. The Corporation may, by a resolution of the Board of Directors of the Corporation, exempt Statutory Auditors from their liabilities under the Old Commercial Code arising prior to the close of the 86th ordinary general meeting of shareholders, to the extent permitted by law.
3. The Corporation may, by a resolution of the Board of Directors of the Corporation, exempt Directors and Corporate Executive Officers from their liabilities arising from actions set forth in Article 21-17, Paragraph 1 of the Law for Special Exceptions to the Commercial Code Concerning Audits, Etc. of Kabushiki-kaisha, which actions are taken prior to the enactment of the Maintenance Law, to the extent permitted by law.
SUPPLEMENTARY PROVISION
The amendment to Article 1 (Trade Name) shall take effect on April 1, 2021, provided that if the Board of Directors of the Corporation determines to change the effective date to another date at a meeting of the Board of Directors to be held before March 31, 2021, the amendment shall take effect on such newly determined date. This supplementary provision shall be deleted after the date when the amendment to Article 1 takes effect.
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Exhibit 2.2
Description of Rights of each Class of Securities
Registered under Section 12 of the Securities Exchange Act of 1934 (the Exchange Act)
Sony Corporation is a joint-stock corporation (Kabushiki Kaisha) incorporated in Japan under the Companies Act (Kaishaho) of Japan. It is registered in the Commercial Register (Shogyo Tokibo) maintained by the Minato Branch Office of the Tokyo Legal Affairs Bureau.
American Depositary Shares (ADSs), each representing one (1) share of common stock (Share) of Sony Corporation, are listed and traded on the New York stock Exchange, or the NYSE, under the symbol SNE, and in connection with this listing (but not for trading), the Shares are registered under Section 12(b) of the Exchange Act. This exhibit contains a description of the rights of (i) the holders of Shares and (ii) the holders of ADSs. Shares underlying the ADSs are held by Citibank, N.A., as depositary, and holders of ADSs are not treated as holders of Shares.
I. Description of Common Shares
Unless indicated otherwise, set forth below is information concerning the shares of Sony Corporations capital stock, including brief summaries of the relevant provisions of Sony Corporations Articles of Incorporation and Share Handling Regulations, currently in effect, and of the Companies Act and related regulations. Because it is a summary, this discussion should be read together with Sony Corporations Articles of Incorporation and Share Handling Regulations. Capitalized terms used but not defined herein have the meanings given to them in Sony Corporations annual report on Form 20-F for the fiscal year ended March 31, 2020.
General
On January 5, 2009, a central book-entry transfer system for shares of Japanese listed companies was established pursuant to the Act Concerning Book-entry Transfer of Corporate Bonds, Shares, etc. (including regulations promulgated thereunder, Book-entry Transfer Act), and this system is applied to the shares of Common Stock of Sony Corporation. Under this system, shares of all Japanese companies listed on any Japanese stock exchange are dematerialized, and shareholders must have accounts at account management institutions to hold their shares unless such shareholder has an account at Japan Securities Depository Center, Inc. (JASDEC). Account management institutions are financial instruments traders (i.e., securities companies), banks, trust companies and certain other financial institutions that meet the requirements prescribed by the Book-entry Transfer Act. Transfer of the shares of Common Stock of Sony Corporation is effected exclusively through entry in the records maintained by JASDEC and the account management institutions, and title to the shares passes to the transferee at the time when the transfer of the shares is recorded at the transferees account at an account management institution. The holder of an account at an account management institution is presumed to be the legal holder of the shares recorded in such account.
Under the Companies Act and the Book-entry Transfer Act, in order to assert shareholders rights against Sony Corporation, a shareholder of shares must have its name and address registered in Sony Corporations register of shareholders. Under the central book-entry transfer system operated by JASDEC, shareholders shall notify the relevant account management institutions of certain information prescribed under the Book-entry Transfer Act or Sony Corporations Share Handling Regulations, including their names and addresses, and the registration on Sony Corporations register of shareholders is updated upon receipt by Sony Corporation of necessary information from JASDEC (as described in Record date). On the other hand, in order to assert, against Sony Corporation, shareholders rights to which shareholders are entitled, regardless of whether such shareholder held shares on the requisite record date, such as minority shareholders rights, including the right to propose a matter to be considered at a General Meeting of Shareholders, except for shareholders rights to request that Sony Corporation purchase or sell shares constituting less than a full unit (as described in Unit share system), JASDEC shall, upon the shareholders request, issue a notice of certain information, including the name and address of such shareholder, to Sony Corporation.
Thereafter, such shareholder is required to present Sony Corporation a receipt of the notice request in accordance with the Sony Corporations Share Handling Regulations. Under the Book-entry Transfer Act, the shareholder shall exercise such shareholders right within four weeks after the notice above has been given to Sony Corporation.
Mitsubishi UFJ Trust and Banking Corporation is the transfer agent for Sony Corporations capital stock. As such, it keeps Sony Corporations register of shareholders in its office at 4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo.
Non-resident shareholders are required to appoint a standing proxy in Japan or file notice of a mailing address in Japan. Notices from Sony Corporation to non-resident shareholders are delivered to such standing proxies or mailing address. Japanese securities companies and commercial banks customarily act as standing proxies and provide related services for standard fees. The recorded holder of deposited shares underlying the ADSs is the depositary for the ADSs. Accordingly, holders of ADSs will not be able to directly assert shareholders rights against Sony Corporation.
Authorized capital
Under the Articles of Incorporation of Sony Corporation, Sony Corporation may only issue shares of Common Stock. Sony Corporations Articles of Incorporation provide that the total number of shares authorized to be issued by Sony Corporation is 3.6 billion shares.
All shares of capital stock of Sony Corporation have no par value. All issued shares are fully-paid and non-assessable.
Distribution of Surplus
Distribution of Surplus General
Under the Companies Act, distributions of cash or other assets by joint stock corporations to their shareholders, so called dividends, are referred to as distributions of Surplus (Surplus is defined in Restriction on distribution of Surplus). Sony Corporation may make distributions of Surplus to shareholders any number of times per business year, subject to certain limitations described in Restriction on distribution of Surplus. Distributions of Surplus are required in principle to be authorized by a resolution of a General Meeting of Shareholders, but Sony Corporation may authorize distributions of Surplus by a resolution of the Board of Directors as long as its non-consolidated annual financial statements and certain documents for the last business year present fairly its assets and profit or loss, as required by ordinances of the Ministry of Justice.
Distributions of Surplus may be made in cash or in kind in proportion to the number of shares of Common Stock held by each shareholder. A resolution of the Board of Directors or a General Meeting of Shareholders authorizing a distribution of Surplus must specify the kind and aggregate book value of the assets to be distributed, the manner of allocation of such assets to shareholders, and the effective date of the distribution. If a distribution of Surplus is to be made in kind, Sony Corporation may, pursuant to a resolution of the Board of Directors or (as the case may be) a General Meeting of Shareholders, grant a right to the shareholders to require Sony Corporation to make such distribution in cash instead of in kind. If no such right is granted to shareholders, the relevant distribution of Surplus must be approved by a special resolution of a General Meeting of Shareholders (refer to Voting rights with respect to a special resolution).
Under the Articles of Incorporation of Sony Corporation, year-end dividends and interim dividends may be distributed in cash to shareholders appearing in Sony Corporations register of shareholders as of March 31 and September 30 each year, respectively, in proportion to the number of shares of Common Stock held by each shareholder following approval by the Board of Directors or (as the case may be) the General Meeting of Shareholders. Sony Corporation is not obliged to pay any dividends in cash unclaimed for a period of five years after the date on which they first became payable.
In Japan, the ex-dividend date and the record date for dividends precede the date of determination of the amount of the dividends to be paid. The price of the shares of Common Stock generally goes ex-dividend on the business day immediately prior to the record date (or if the record date is not a business day, the second business day prior thereto).
Distribution of Surplus Restriction on distribution of Surplus
In making a distribution of Surplus, Sony Corporation must, until the sum of its additional paid-in capital and legal reserve reaches one quarter of its stated capital, set aside in its additional paid-in capital and/or legal reserve an amount equal to one-tenth of the amount of Surplus so distributed.
The amount of Surplus at any given time must be calculated in accordance with the following formula:
A + B + C + D - (E + F + G)
In the above formula:
A = | the total amount of other capital surplus and other retained earnings, each such amount being that appearing on the non-consolidated balance sheet as of the end of the last business year | |
B = | (if Sony Corporation has disposed of its treasury stock after the end of the last business year) the amount of the consideration for such treasury stock received by Sony Corporation less the book value thereof | |
C = | (if Sony Corporation has reduced its stated capital after the end of the last business year) the amount of such reduction less the portion thereof that has been transferred to additional paid-in capital or legal reserve (if any) | |
D = | (if Sony Corporation has reduced its additional paid-in capital or legal reserve after the end of the last business year) the amount of such reduction less the portion thereof that has been transferred to stated capital (if any) | |
E = | (if Sony Corporation has cancelled its treasury stock after the end of the last business year) the book value of such treasury stock | |
F = | (if Sony Corporation has distributed Surplus to its shareholders after the end of the last business year) the total book value of the Surplus so distributed | |
G = | certain other amounts set forth in ordinances of the Ministry of Justice, including (if Sony Corporation has reduced Surplus and increased its stated capital, additional paid-in capital or legal reserve after the end of the last business year) the amount of such reduction and (if Sony Corporation has distributed Surplus to the shareholders after the end of the last business year) the amount set aside in additional paid-in capital or legal reserve (if any) as required by ordinances of the Ministry of Justice. |
The aggregate book value of Surplus distributed by Sony Corporation may not exceed a prescribed distributable amount (the Distributable Amount), as calculated on the effective date of such distribution. The Distributable Amount at any given time shall be equal to the amount of Surplus less the aggregate of the following:
(a) |
the book value of its treasury stock; |
(b) |
the amount of consideration for any of treasury stock disposed of by Sony Corporation after the end of the last business year; and |
(c) |
certain other amounts set forth in ordinances of the Ministry of Justice, including (if the sum of one-half of goodwill and the deferred assets exceeds the total of stated capital, additional paid-in capital and legal reserve, each such amount being that appearing on the non-consolidated balance sheet as of the end of the last business year) all or certain part of such exceeding amount as calculated in accordance with ordinances of the Ministry of Justice. |
As Sony Corporation has become a company with respect to which consolidated balance sheets should also be considered in the calculation of the Distributable Amount (renketsu haito kisei tekiyo kaisha), Sony Corporation must further deduct from the amount of Surplus the excess amount, if any, of (x) the total amount of stockholders equity appearing on the non-consolidated balance sheet as of the end of the last business year and certain other amounts set forth by an ordinance of the Ministry of Justice over (y) the total amount of stockholders equity and certain other amounts set forth by an ordinance of the Ministry of Justice appearing on the consolidated balance sheet as of the end of the last business year.
If Sony Corporation has prepared interim financial statements as described below, and if such interim financial statements have been approved by the Board of Directors or (if so required by the Companies Act) by a General Meeting of Shareholders, then the Distributable Amount must be adjusted to take into account the amount of profit or loss, and the amount of consideration for any of the treasury stock disposed of by Sony Corporation, during the period in respect of which such interim financial statements have been prepared. Sony Corporation may prepare non-consolidated interim financial statements consisting of a balance sheet as of any date subsequent to the end of the last business year and an income statement for the period from the first day of the current business year to the date of such balance sheet. Interim financial statements so prepared by Sony Corporation must be audited by the Audit Committee and the independent auditor, as required by the Companies Act and in accordance with the details prescribed by ordinances of the Ministry of Justice.
Capital and reserves
Sony Corporation may generally reduce its additional paid-in capital or legal reserve by resolution of a General Meeting of Shareholders and, if so decided by the same resolution, may account for the whole or any part of the amount of such reduction as stated capital. On the other hand, Sony Corporation may generally reduce its stated capital by a special shareholders resolution (as defined in Voting rights) and, if so decided by the same resolution, may account for the whole or any part of the amount of such reduction as additional paid-in capital. In addition, Sony Corporation may reduce its Surplus and increase either (i) stated capital or (ii) additional paid-in capital and/or legal reserve by the same amount, in either case by resolution of a General Meeting of Shareholders.
Stock splits
Sony Corporation may at any time split shares in issue into a greater number of shares at the determination of the CEO, and may amend its Articles of Incorporation to increase the number of the authorized shares to be issued to allow such stock split pursuant to a resolution of the Board of Directors or a determination by a Corporate Executive Officer to whom the authority to make such determination has been delegated by a resolution of the Board of Directors, rather than relying on a special shareholders resolution, which is otherwise required for amending the Articles of Incorporation.
When a stock split is to be made, Sony Corporation must give public notice of the stock split, specifying the record date thereof, at least two weeks prior to such record date. Under the central book-entry transfer system operated by JASDEC, Sony Corporation must also give notice to JASDEC regarding a stock split at least two weeks prior to the relevant effective date of the stock split. On the effective date of the stock split, the numbers of shares recorded in all accounts held by Sony Corporations shareholders at account managing institutions or JASDEC will be increased in accordance with the applicable ratio.
Consolidation of shares
Sony Corporation may at any time consolidate issued shares into a smaller number of shares by a special shareholders resolution. When a consolidation of shares is to be made, Sony Corporation must give public notice or notice to each shareholder at least two weeks prior to the effective date of the consolidation of shares. Under the central book-entry transfer system operated by JASDEC, Sony Corporation must also give notice to JASDEC regarding a consolidation of shares at least two weeks prior to the effective date of the consolidation of shares. On the effective date of the consolidation of shares, the numbers of shares recorded in all accounts held by Sony Corporations shareholders at account managing institutions or JASDEC will be decreased in accordance with the applicable ratio. Sony Corporation must disclose the reason for the consolidation of shares at a General Meeting of Shareholders.
General Meeting of Shareholders
The Ordinary General Meeting of Shareholders of Sony Corporation for each business year is normally held in June of each year in Tokyo, Japan. In addition, Sony Corporation may hold an Extraordinary General Meeting of Shareholders whenever necessary by giving notice thereof at least two weeks prior to the date set for the meeting.
Notice of a shareholders meeting setting forth the place, time and purpose thereof must be mailed to each shareholder having voting rights (or, in the case of a non-resident shareholder, to such shareholders resident proxy or mailing address in Japan) at least two weeks prior to the date set for the meeting. Under the Companies Act, such notice may be given to shareholders by electronic means, subject to obtaining consent by the relevant shareholders. The record date for an Ordinary General Meeting of Shareholders is March 31 of each year.
Any shareholder or group of shareholders holding at least 3% of the total number of voting rights for a period of six months or more may require the convocation of a General Meeting of Shareholders for a particular purpose. Unless such a shareholders meeting is convened promptly or a convocation notice of a meeting which is to be held not later than eight weeks from the day of such demand is dispatched, the requiring shareholder may, upon obtaining a court approval, convene such a shareholders meeting.
Any shareholder or group of shareholders holding at least 300 voting rights or 1% of the total number of voting rights for a period of six months or more may propose a matter to be considered at a General Meeting of Shareholders by submitting a written request to Sony Corporation at least eight weeks prior to the date set for such meeting.
If the Articles of Incorporation so provide, any of the minimum voting rights or percentages, time periods and number of voting rights necessary for exercising the minority shareholder rights described above may be decreased or shortened. Sony Corporations Articles of Incorporation currently do not include any such provisions.
Voting rights
So long as Sony Corporation maintains the unit share system, a holder of shares constituting one or more units is entitled to one vote for each such unit of stock (refer to Unit share system below; currently 100 shares constitute one unit), except that no voting rights with respect to shares of capital stock of Sony Corporation are afforded to Sony Corporation or any corporate or certain other entities more than one-quarter of the total voting rights of which are directly or indirectly held by Sony Corporation. If Sony Corporation eliminates from its Articles of Incorporation the provisions relating to units of stock, holders of capital stock will have one vote for each share they hold. Except as otherwise provided by law or by the Articles of Incorporation of Sony Corporation, a resolution can be adopted at a General Meeting of Shareholders by a majority of the number of voting rights of all the shareholders represented at the meeting. The Companies Act and Sony Corporations Articles of Incorporation provide, however, that the quorum for the election of Directors shall be one-third of the total number of voting rights of all the shareholders. Sony Corporations shareholders are not entitled to cumulative voting in the election of Directors. Shareholders may cast their votes in writing and may also exercise their voting rights through proxies, provided that the proxies are also shareholders holding voting rights. Shareholders may also exercise their voting rights by electronic means pursuant to the method designated by Sony Corporation.
The Companies Act and the Articles of Incorporation of Sony Corporation provide that in order to amend the Articles of Incorporation and in certain other instances, including:
(1) |
acquisition of its own shares from a specific party other than its subsidiaries; |
(2) |
consolidation of shares; |
(3) |
any offering of new shares or existing shares held by Sony Corporation as treasury stock at a specially favorable price (or any offering of stock acquisition rights to acquire shares of capital stock, or bonds with stock acquisition rights on specially favorable conditions) to any persons other than shareholders; |
(4) |
the exemption of liability of a Director, Corporate Executive Officer or independent auditor with certain exceptions; |
(5) |
a reduction of stated capital with certain exceptions; |
(6) |
a distribution of in-kind dividends which meets certain requirements; |
(7) |
dissolution, merger, consolidation, or corporate split with certain exceptions; |
(8) |
the transfer of the whole or a material part of the business; |
(9) |
the transfer of the whole or a part of the shares or equity interests in a subsidiary which meets certain requirements; |
(10) |
the taking over of the whole of the business of any other corporation with certain exceptions; or |
(11) |
share exchange or share transfer for the purpose of establishing 100% parent-subsidiary relationships with certain exceptions, |
the quorum shall be one-third of the total number of voting rights of all the shareholders, and the approval by at least two-thirds of the number of voting rights of all the shareholders represented at the meeting is required (the special shareholders resolutions).
Issue of additional shares and pre-emptive rights
Holders of Sony Corporations shares of capital stock have no pre-emptive rights under its Articles of Incorporation. Authorized but unissued shares may be issued, or existing shares held by Sony Corporation as treasury stock may be transferred, at such times and upon such terms as the Board of Directors or the CEO determines, subject to the limitations as to the offering of new shares or transfer of existing shares held by Sony Corporation as treasury stock at a specially favorable price mentioned under Voting rights above.
In the case of an issuance of shares (including a transfer of existing shares held by Sony Corporation as treasury stock) or stock acquisition rights whereby any subscriber will hold more than 50% of the voting rights of all shareholders, generally Sony Corporation shall give public notice at least two weeks prior to the payment date for such issuance, and if shareholders who hold one-tenth or more of the voting rights of all shareholders dissent from the issuance of shares or stock acquisition rights, the approval by a resolution of a General Meeting of
Shareholders is generally required before the payment date pursuant to the Companies Act. In addition, in the case of an issuance of shares (including a transfer of existing shares held by Sony Corporation as treasury stock) or stock acquisition rights by way of an allotment to a third party which would dilute the outstanding voting shares by 25% or more or change the controlling shareholder, in addition to a resolution of the Board of Directors, the approval of the shareholders or an affirmative vote from a person independent of the management is generally required pursuant to the rules of the TSE. The Board of Directors or the CEO may, however, determine that shareholders shall be given subscription rights regarding a particular issue of new shares, in which case such rights must be given on uniform terms to all shareholders as of a record date of which not less than two weeks prior public notice is given. Each of the shareholders to whom such rights are given must also be given notice of the expiry thereof at least two weeks prior to the date on which such rights expire.
Subject to certain conditions, Sony Corporation may issue stock acquisition rights by a resolution of the Board of Directors or a determination by the CEO. Holders of stock acquisition rights may exercise their rights to acquire a certain number of shares within the exercise period as prescribed in the terms of their stock acquisition rights. Upon exercise of stock acquisition rights, Sony Corporation will be obliged to issue the relevant number of new shares or alternatively to transfer the necessary number of shares of treasury stock held by it.
In cases where a particular issue of new shares or stock acquisition rights (i) violates laws and regulations or Sony Corporations Articles of Incorporation, or (ii) will be performed in a materially unfair manner, and shareholders may suffer disadvantages therefrom, such shareholders may file an injunction to enjoin such issue with a court.
Liquidation rights
In the event of a liquidation of Sony Corporation, the assets remaining after payment of all debts, liquidation expenses and taxes will be distributed among the holders of shares of Common Stock in proportion to the respective numbers of shares of Common Stock held.
Record date
March 31 is the record date for Sony Corporations year-end dividends, if declared. So long as Sony Corporation maintains the unit share system, shareholders who are registered as the holders of one or more unit of stock in Sony Corporations register of shareholders at the end of each March 31 are also entitled to exercise shareholders rights at the Ordinary General Meeting of Shareholders with respect to the business year ending on such March 31. September 30 is the record date for interim dividends, if declared. In addition, Sony Corporation may set a record date for determining the shareholders entitled to other rights and for other purposes by giving at least two weeks prior public notice.
JASDEC is required to promptly give Sony Corporation notice of the names and addresses of Sony Corporations shareholders, the numbers of shares of Common Stock held by them and other relevant information as of such respective record dates.
The price of shares generally goes ex-dividends or ex-rights on Japanese stock exchanges on the business day immediately prior to a record date (or if the record date is not a business day, the second business day prior thereto), for the purpose of dividends or rights offerings.
Acquisition by Sony Corporation of its capital stock
Under the Companies Act and the Articles of Incorporation of Sony Corporation, Sony Corporation may acquire shares of Common Stock (i) from a specific shareholder other than any of its subsidiaries (pursuant to the special shareholders resolution), (ii) from any of its subsidiaries (pursuant to a determination by the CEO as delegated by the Board of Directors), or (iii) by way of purchase on any Japanese stock exchange on which Sony Corporations shares of Common Stock are listed or by way of tender offer (pursuant to a resolution of the Board of Directors, as long as its non-consolidated annual financial statements and certain documents for the last business year present fairly its assets and profit or loss, as required by ordinances of the Ministry of Justice).
In the case of (i) above, any other shareholder may make a request to Sony Corporation that such other shareholder be included as a seller in the proposed purchase, provided that no such right will be available if the purchase price or any other consideration to be received by the relevant specific shareholder will not exceed the last trading price of the shares on the relevant stock exchange on the day immediately preceding the date on which the resolution mentioned in (i) above was adopted (or, if there is no trading in the shares on the stock exchange or if the stock exchange is not open on such day, the price at which the shares are first traded on such stock exchange thereafter).
The total amount of the purchase price of shares of Common Stock may not exceed the Distributable Amount, as described in Distribution of Surplus Distribution of Surplus Restriction on distribution of Surplus.
Shares acquired by Sony Corporation may be held for any period or may be retired at the determination of the CEO. Sony Corporation may also transfer (by public or private sale or otherwise) to any person the treasury stock held by it, subject to a determination by the CEO, and subject also to other requirements similar to those applicable to the issuance of new shares, as described in Issue of additional shares and pre-emptive rights above. Sony Corporation may also utilize its treasury stock for the purpose of transfer to any person upon exercise of stock acquisition rights or for the purpose of acquiring another company by way of merger, share exchange or corporate split through exchange of treasury stock for shares or assets of the acquired company.
Unit share system
The Articles of Incorporation of Sony Corporation provide that 100 shares constitute one unit of shares of stock. The Board of Directors or the Corporate Executive Officer to whom the authority to make such a determination has been delegated by a resolution of the Board of Directors is permitted to amend the Articles of Incorporation to reduce the number of shares that constitute a unit or to abolish the unit share system entirely. Under the Companies Act, the number of shares constituting one unit cannot exceed 1,000 shares nor 0.5% of the total number of issued shares.
Under the unit share system, shareholders have one voting right for each unit of stock that they hold. Any number of shares less than one full unit have neither voting rights nor rights related to voting rights. Holders of shares constituting less than one unit will have no other shareholder rights if Sony Corporations Articles of Incorporation so provide, except that such holders may not be deprived of certain rights specified in the Companies Act or an ordinance of the Ministry of Justice, including the right to receive distribution of Surplus.
A holder of shares constituting less than one full unit may require Sony Corporation to purchase such shares at their market value in accordance with the provisions of the Share Handling Regulations of Sony Corporation. In addition, the Articles of Incorporation of Sony Corporation provide that a holder of shares constituting less than one full unit may request Sony Corporation to sell to such holder such amount of shares which will, when added together with the shares constituting less than one full unit, constitute one full unit of stock. Such request by a holder and the sale by Sony Corporation must be made in accordance with the provisions of the Share Handling Regulations of Sony Corporation. As prescribed in the Share Handling Regulations, such requests shall be made through an account management institution and JASDEC pursuant to the rules set by JASDEC, without going through the notification procedure required for the exercise of the shareholders rights to which shareholders are entitled, regardless of whether such shareholder held shares on the requisite record date, as described in General. Shares constituting less than a full unit are transferable, under the central book-entry transfer system described in General. Under the rules of the Japanese stock exchanges, however, shares constituting less than a full unit do not comprise a trading unit, except in limited circumstances, and accordingly may not be sold on the Japanese stock exchanges.
Sale by Sony Corporation of shares held by shareholders whose location is unknown
Sony Corporation is not required to send a notice to a shareholder if a notice to such shareholder fails to arrive at the registered address of the shareholder in Sony Corporations register of shareholders or at the address otherwise notified to Sony Corporation continuously for five years or more.
In addition, Sony Corporation may sell or otherwise dispose of shares of capital stock for which the location of the shareholder is unknown. Generally, if (i) notices to a shareholder fail to arrive continuously for five years or more at the shareholders registered address in Sony Corporations register of shareholders or at the address otherwise notified to Sony Corporation, and (ii) the shareholder fails to receive distributions of Surplus on the shares continuously for five years or more at the address registered in Sony Corporations register of shareholders or at the address otherwise notified to Sony Corporation, Sony Corporation may sell or otherwise dispose of such shareholders shares at the then market price of the shares by a determination of a Corporate Executive Officer and after giving at least three months prior public and individual notice, and hold or deposit the proceeds of such sale or disposal of shares for such shareholder.
Reporting of substantial shareholdings
The Financial Instruments and Exchange Act of Japan and its related regulations require any person, regardless of residence, who has become, beneficially and solely or jointly, a holder of more than 5% of the total
issued shares of capital stock of a company listed on any Japanese stock exchange or whose shares are traded on the over-the-counter market in Japan to file with the Director General of the competent Local Finance Bureau of the Ministry of Finance within five business days a report concerning such shareholdings. A similar report must also be filed in respect of any subsequent change of 1% or more in any such holding, or any change in material matters set out in reports previously filed, with certain exceptions. For this purpose, shares issuable to such persons upon conversion of convertible securities or exercise of share subscription warrants or stock acquisition rights are taken into account in determining both the number of shares held by such holders and the issuers total issued share capital. Any such report shall be filed with the Director General of the relevant Local Finance Bureau of the Ministry of Finance through the Electronic Disclosure for Investors Network (EDINET) system.
Ownership restrictions
Except for the general limitation under Japanese anti-trust and anti-monopoly regulations against holding of shares of capital stock of a Japanese corporation which leads or may lead to a restraint of trade or monopoly, except for the limitations under the Foreign Exchange Regulations as described in Item 10D. Exchange Controls of Sony Corporations annual report on Form 20-F for the fiscal year ended March 31, 2020, and except for general limitations under the Companies Act or Sony Corporations Articles of Incorporation on the rights of shareholders applicable regardless of residence or nationality, there is no limitation under Japanese laws and regulations applicable to Sony Corporation or under its Articles of Incorporation on the rights of non-residents or foreign shareholders to hold or exercise voting rights on the shares of capital stock of Sony Corporation.
There is no provision in Sony Corporations Articles of Incorporation or internal regulations that would have an effect of delaying, deferring or preventing a change in control of Sony Corporation and that would operate only with respect to a merger, acquisition or corporate restructuring involving Sony Corporation.
II. Description of American Depositary Shares
General
Citibank, N.A. serves as the Depositary for the American Depositary Shares. Citibanks depositary offices are located at 388 Greenwich Street, New York, New York 10013. American Depositary Shares are frequently referred to as ADSs and represent ownership interests in securities that are on deposit with the Depositary. ADSs may be represented by certificates that are commonly known as American Depositary Receipts or ADRs. The Depositary typically appoints a custodian to safekeep the securities on deposit. In this case, the Custodian is The Bank of Tokyo-Mitsubishi UFJ, Ltd., having its principal office at Global Securities Services Division, 3-2, Nihombashi Hongokucho 1-Chome, Chuo-ku, Tokyo 103-0021 Japan.
Sony Corporation has appointed Citibank as Depositary pursuant to a Deposit Agreement. A copy of the Deposit Agreement is on file with the SEC under cover of a Registration Statement on Form F-6. Holders of ADSs may obtain a copy of the Deposit Agreement from the SECs Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549 and from the SECs website (www.sec.gov). Please refer to Registration Number 333-198953 when retrieving such copy.
Sony Corporation is providing this summary description of the material terms of the ADSs and of ADS holders material rights as owners of ADSs. Please remember that summaries by their nature lack the precision of the information summarized and that the rights and obligations of ADS owners will be determined by reference to the terms of the Deposit Agreement and not by this summary. This summary should be read together with Sony Corporations Deposit Agreement in its entirety. Capitalized terms used but not defined herein have the meanings given to them in the Deposit Agreement. The portions of this summary description that are italicized describe matters that may be relevant to the ownership of ADSs but that may not be contained in the Deposit Agreement.
Each ADS represents the right to receive, and to exercise the beneficial ownership interests in, one Share that is on deposit with the Depositary and/or the Custodian. An ADS also represents the right to receive, and to exercise the beneficial interests in, any other property received by the Depositary or the Custodian on behalf of the owner of the ADS but that has not been distributed to an ADS owner because of legal restrictions or practical considerations. Sony Corporation and the Depositary may agree to change the ADS-to-Shares ratio by amending the Deposit Agreement. This amendment may give rise to, or change, the Depositary fees payable by ADS owners. The Custodian, the Depositary and their respective nominees will hold all deposited property for the benefit of the holders and beneficial owners of ADSs. The deposited property does not constitute the proprietary assets of the Depositary, the Custodian or their nominees. Beneficial ownership in the deposited property will under the terms of the Deposit Agreement be vested in the beneficial owners of the ADSs. The Depositary, the Custodian and their respective nominees will be the record holders of the deposited property represented by the
ADSs for the benefit of the holders and beneficial owners of the corresponding ADSs. A beneficial owner of ADSs may or may not be the holder of ADSs. Beneficial owners of ADSs will be able to receive, and to exercise beneficial ownership interests in, the deposited property only through the registered holders of the ADSs, by the registered holders of the ADSs (on behalf of the applicable ADS owners) only through the Depositary, and by the Depositary (on behalf of the owners of the corresponding ADSs) directly, or indirectly, through the Custodian or their respective nominees, in each case upon the terms of the Deposit Agreement.
An owner of ADSs becomes a party to the Deposit Agreement and therefore will be bound to its terms and to the terms of any ADR that represents the ADSs. The Deposit Agreement and the ADR specify Sony Corporations rights and obligations as well as ADS holders rights and obligations as owners of ADSs and those of the Depositary. ADS holders appoint the Depositary to act on the holders behalf in certain circumstances. The Deposit Agreement and the ADRs are governed by New York law. However, Sony Corporations obligations to the holders of Shares will continue to be governed by the laws of Japan, which may be different from the laws in the United States.
In addition, applicable laws and regulations may require holders of ADSs to satisfy reporting requirements and obtain regulatory approvals in certain circumstances. Holders of ADSs are solely responsible for complying with such reporting requirements and obtaining such approvals. Neither the Depositary, the Custodian, Sony Corporation or any of their or Sony Corporations respective agents or affiliates shall be required to take any actions whatsoever on behalf of ADS holders to satisfy such reporting requirements or obtain such regulatory approvals under applicable laws and regulations.
Sony Corporation will not treat ADS holders as its shareholders and ADS holders will not have direct shareholder rights. The Depositary will hold on ADS holders behalves the shareholder rights attached to the Shares underlying their ADSs. ADS holders will be able to exercise the shareholder rights for the Shares represented by their ADSs through the Depositary only to the extent contemplated in the Deposit Agreement. To exercise any shareholder rights not contemplated in the Deposit Agreement, ADS owners need to arrange for the cancellation of their ADSs and become direct shareholders.
The manner in which a holder of ADSs owns the ADSs (e.g., in a brokerage account vs. as registered holder, or as holder of certificated vs. uncertificated ADSs) may affect the holders rights and obligations, and the manner in which, and extent to which, the Depositarys services are made available to the holder. A holder of ADSs may hold ADSs either by means of an ADR registered in the holders name, through a brokerage or safekeeping account, or through an account established by the Depositary in the holders name reflecting the registration of uncertificated ADSs directly on the books of the Depositary (commonly referred to as the direct registration system or DRS). The direct registration system reflects the uncertificated (book-entry) registration of ownership of ADSs by the Depositary. Under the direct registration system, ownership of ADSs is evidenced by periodic statements issued by the Depositary to the holders of the ADSs. The direct registration system includes automated transfers between the Depositary and The Depository Trust Company (DTC), the central book-entry clearing and settlement system for equity securities in the United States. If a holder of ADSs decides to hold ADSs through the holders brokerage or safekeeping account, the holder must rely on the procedures of the holders broker or bank to assert the holders rights as an ADS owner. Banks and brokers typically hold securities such as ADSs through clearing and settlement systems such as DTC. The procedures of such clearing and settlement systems may limit an ADS holders ability to exercise the holders rights as an owner of ADSs. A holder of ADSs who has any questions concerning these limitations and procedures should consult with the holders broker or bank. All ADSs held through DTC will be registered in the name of a nominee of DTC.
The registration of the Shares in the name of the Depositary or the Custodian shall, to the maximum extent permitted by applicable law, vest in the Depositary or the Custodian the record ownership in the applicable Shares with the beneficial ownership rights and interests in such Shares being at all times vested with the beneficial owners of the ADSs representing the Shares. The Depositary or the Custodian shall at all times be entitled to exercise the beneficial ownership rights in all deposited property, in each case only on behalf of the holders and beneficial owners of the ADSs representing the deposited property.
Dividends and distributions
Holders of ADSs generally have the right to receive the distributions Sony Corporation makes on the securities deposited with the Custodian. An ADS holders receipt of these distributions may be limited, however, by practical considerations and legal limitations. Holders of ADSs will receive such distributions under the terms of the Deposit Agreement in proportion to the number of ADSs held as of the specified record date, after deduction of the applicable fees, taxes and expenses.
Distributions of cash
Whenever Sony Corporation makes a cash distribution for the securities on deposit with the Custodian, Sony Corporation will deposit the funds with the Custodian. Upon receipt of confirmation from the Custodian of the deposit of the requisite funds, the Depositary will, if at the time of receipt thereof any funds received in a currency other than U.S. dollars can, in the judgment of the Depositary, be converted on a practicable basis into U.S. dollars transferable to the United States, arrange for the funds so received to be converted into U.S. dollars and for the distribution of the U.S. dollars to the holders, subject to the laws and regulations of Japan.
The Depositary will apply the same method for distributing the proceeds of the sale of any property (such as undistributed rights) held by the Custodian in respect of securities on deposit.
The distribution of cash will be made net of the fees, expenses, taxes and governmental charges payable by holders under the terms of the Deposit Agreement. The Depositary will hold any cash amounts it is unable to distribute in a non-interest bearing account for the benefit of the applicable holders and beneficial owners of ADSs until the distribution can be effected or the funds that the Depositary holds must be escheated as unclaimed property in accordance with the laws of the relevant states of the United States.
Distributions of shares
Whenever Sony Corporation makes a free distribution of Shares for the securities on deposit with the Custodian, Sony Corporation will deposit the applicable number of Shares with the Custodian. Upon receipt of confirmation of such deposit, the Depositary will either distribute to holders new ADSs representing the Shares deposited or modify the ADS-to-Shares ratio, in which case each ADS held will represent rights and interests in the additional Shares so deposited. Only whole new ADSs will be distributed. Fractional entitlements will be sold and the proceeds of such sale will be distributed as in the case of a cash distribution.
The distribution of new ADSs or the modification of the ADS-to-Shares ratio upon a distribution of Shares will be made net of the fees, expenses, taxes and governmental charges payable by holders under the terms of the Deposit Agreement. In order to pay such taxes or governmental charges, the Depositary may sell all or a portion of the new Shares so distributed.
No such distribution of new ADSs will be made if it would violate a law (e.g., the U.S. securities laws) or if it is not operationally practicable. If the Depositary does not distribute new ADSs as described above, it may sell the Shares received upon the terms described in the Deposit Agreement and will distribute the proceeds of the sale as in the case of a distribution of cash.
Distributions of rights
Whenever Sony Corporation intends to distribute rights to subscribe for additional Shares, Sony Corporation will give prior notice to the Depositary and Sony Corporation will assist the Depositary in determining whether it is lawful and reasonably practicable to distribute rights to subscribe for additional ADSs to holders.
The Depositary will establish procedures to distribute rights to subscribe for additional ADSs to holders and to enable such holders to exercise such rights if it is lawful and reasonably practicable to make the rights available to ADS holders, and if Sony Corporation provides all of the documentation contemplated in the Deposit Agreement (such as opinions to address the lawfulness of the transaction). An ADS holder may have to pay fees, expenses, taxes and other governmental charges to subscribe for the new ADSs upon the exercise of the holders rights. The Depositary is not obligated to establish procedures to facilitate the distribution and exercise by holders of rights to subscribe for new Shares other than in the form of ADSs.
The Depositary will not distribute the rights to holders of ADSs if:
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Sony Corporation does not timely request that the rights be distributed to holders or Sony Corporation requests that the rights not be distributed to holders; |
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Sony Corporation fails to deliver reasonably satisfactory documents to the Depositary; or |
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It is not reasonably practicable to distribute the rights. |
The Depositary will sell the rights that are not exercised or not distributed if such sale is lawful and reasonably practicable. The proceeds of such sale will be distributed to holders as in the case of a cash distribution. If the Depositary is unable to sell the rights, it will allow the rights to lapse.
Elective distributions
Whenever Sony Corporation intends to distribute a dividend payable at the election of shareholders either in cash or in additional shares, Sony Corporation will give prior notice thereof to the Depositary and will indicate whether Sony Corporation wishes the elective distribution to be made available to holders of ADSs. In such case, Sony Corporation will assist the Depositary in determining whether such distribution is lawful and reasonably practicable.
The Depositary will make the election available to holders of ADSs only if the Depositary has determined, upon consultation with Sony Corporation, that it is reasonably practicable and if Sony Corporation has provided all of the documentation contemplated in the Deposit Agreement. In such case, the Depositary will establish procedures to enable holders of ADSs to elect to receive either cash or additional ADSs, in each case as described in the Deposit Agreement.
If the election is not made available to holders of ADSs, holders will receive either cash or additional ADSs, depending on what a shareholder in Japan would receive upon failing to make an election, as more fully described in the Deposit Agreement.
Other distributions
Whenever Sony Corporation intends to distribute property other than cash, Shares or rights to subscribe for additional Shares, Sony Corporation will notify the Depositary in advance and will indicate whether Sony Corporation wishes such distribution to be made to ADS holders. If so, Sony Corporation will assist the Depositary in determining whether such distribution to ADS holders is lawful and reasonably practicable.
If it is reasonably practicable to distribute such property to holders of ADSs and if Sony Corporation provides to the Depositary all of the documentation contemplated in the Deposit Agreement, the Depositary will distribute the property to the holders in a manner it deems practicable.
The distribution will be made net of fees, expenses, taxes and governmental charges payable by holders under the terms of the Deposit Agreement. In order to pay such taxes and governmental charges, the Depositary may sell all or a portion of the property received.
The Depositary will not distribute the property to holders of ADSs and will sell the property if:
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Sony Corporation does not request that the property be distributed to holders or if Sony Corporation requests that the property not be distributed to holders; |
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Sony Corporation does not deliver reasonably satisfactory documents to the Depositary; or |
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The Depositary determines, after consultation with Sony Corporation, that all or a portion of the distribution to holders is not reasonably practicable. |
The proceeds of such a sale will be distributed to holders as in the case of a cash distribution.
Redemption
Whenever Sony Corporation decides to redeem any of the securities on deposit with the Custodian, Sony Corporation will notify the Depositary in advance. If the Depositary has determined, after consultation with Sony Corporation, that it is practicable and if Sony Corporation provides all of the documentation contemplated in the Deposit Agreement, the Depositary will provide notice of the redemption to the holders.
The Custodian will be instructed to surrender the Shares being redeemed against payment of the applicable redemption price. The Depositary will, as soon as reasonably practicable, convert into U.S. dollars upon the terms of the Deposit Agreement the redemption funds received in a currency other than U.S. dollars and will establish procedures to enable holders to receive the net proceeds from the redemption upon surrender of their ADSs to the Depositary. A holder of ADSs may have to pay fees, expenses, applicable taxes and other governmental charges upon the redemption of the holders ADSs. If less than all ADSs are being redeemed, the ADSs to be retired will be selected on a pro rata basis.
Changes affecting shares
The Shares held on deposit for holders ADSs may change from time to time. For example, there may be a change in nominal or par value, split-up, cancellation, consolidation or any other reclassification of such Shares or a recapitalization, reorganization, merger, consolidation or sale of assets of the Company.
If any such change were to occur, holders ADSs would, to the extent permitted by law and the Deposit Agreement, represent the right to receive the property received or exchanged in respect of the Shares held on deposit. The Depositary may in such circumstances deliver new ADSs to holders (and deliver ADRs evidencing such ADSs, as applicable), amend the Deposit Agreement, the form of ADR then outstanding and the applicable Registration Statement(s) on Form F-6, call for the exchange of holders existing ADRs for new ADRs and take any other actions reasonably requested by Sony Corporation or as the Depositary in consultation with Sony Corporation considers appropriate to reflect as to the ADSs the change affecting the Shares. If, in the reasonable judgment of the Depositary, upon consultation with Sony Corporation, the Depositary may not lawfully distribute such property to holders of ADSs, the Depositary may sell such property and distribute the net proceeds to holders as in the case of a cash distribution.
Issuance of ADSs upon deposit of shares
The Depositary may create ADSs on a holders behalf if the holder or the holders broker deposits Shares with the Custodian. The Depositary will deliver these ADSs to the person the holder indicates only after the holder pays any applicable issuance fees and any charges and taxes payable for the transfer of the Shares to the Custodian. A holders ability to deposit Shares and receive ADSs may be limited by U.S. and Japanese legal considerations applicable at the time of deposit.
The issuance of ADSs may be delayed until the Depositary or the Custodian receives confirmation that all required approvals have been given and that the Shares have been duly transferred to the Custodian. The Depositary will only issue ADSs in whole numbers.
When an ADS holder make a deposit of Shares, the holder will be responsible for transferring good and valid title to the Depositary. As such, the holder will be deemed to represent and warrant that:
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The Shares are duly authorized, validly issued, fully paid, non-assessable and legally obtained; |
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All preemptive (and similar) rights, if any, with respect to such Shares have been validly waived or exercised; |
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The holder is duly authorized to deposit the Shares; |
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The Shares presented for deposit are free and clear of any lien, encumbrance, security interest, charge, mortgage or adverse claim, and are not, and the ADSs issuable upon such deposit will not be, restricted securities (as defined in the Deposit Agreement); and |
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The Shares presented for deposit have not been stripped of any rights or entitlements. |
If any of the representations or warranties are incorrect in any way, Sony Corporation and the Depositary may, at the holders cost and expense, take any and all actions necessary to correct the consequences of the misrepresentations.
Transfer, combination and split up of ADRs
ADS holders are entitled to transfer, combine or split up their ADRs and the ADSs evidenced thereby. For transfers of ADRs, a holder will have to surrender the ADRs to be transferred to the Depositary and also must:
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Ensure that the surrendered ADR is properly endorsed or otherwise in proper form for transfer; |
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Provide such proof of identity and genuineness of signatures as the Depositary deems appropriate; |
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Provide any transfer stamps required by the State of New York or the United States; and |
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Pay all applicable fees, charges, expenses, taxes and other government charges payable by ADR holders pursuant to the terms of the Deposit Agreement, upon the transfer of ADRs. |
To have ADRs either combined or split up, a holder must surrender the ADRs in question to the Depositary with the holders request to have them combined or split up, and the holder must pay all applicable fees, charges and expenses payable by ADR holders, pursuant to the terms of the Deposit Agreement and of applicable law, upon a combination or split up of ADRs.
Withdrawal of shares upon cancellation of ADSs
ADS holders are entitled to present their ADSs to the Depositary for cancellation and then receive the corresponding number of underlying Shares at the Custodians offices. An ADS holders ability to withdraw the
Shares held in respect of the ADSs may be limited by U.S. and Japanese law considerations applicable at the time of withdrawal. In order to withdraw the Shares represented by a holders ADSs, the holder will be required to pay to the Depositary the fees for cancellation of ADSs and any charges and taxes payable upon the transfer of the Shares. The holder assumes the risk for delivery of all funds and securities upon withdrawal. Once canceled, the ADSs will not have any rights under the Deposit Agreement.
If ADSs are registered in the holders name, the Depositary may ask the holder to provide proof of identity and genuineness of any signature and such other documents as the Depositary may deem appropriate before it will cancel the holders ADSs. The withdrawal of the Shares represented by the holders ADSs may be delayed until the Depositary receives satisfactory evidence of compliance with all applicable laws and regulations. Holders of ADSs should keep in mind that the Depositary will only accept ADSs for cancellation that represent a whole number of securities on deposit.
Pursuant to the Companies Act of Japan and to Sony Corporations Articles of Incorporation, the release of the Shares may be limited to a unit of 100 Shares (or such other number of Shares as the Articles of Incorporation may from time to time designate as a unit of shares) or integral multiples thereof.
Holders of ADSs will have the right to withdraw the securities represented by the holders ADSs at any time except for:
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Temporary delays that may arise because (i) the transfer books for the Shares or ADSs are closed, or (ii) Shares are immobilized on account of a shareholders meeting or a payment of dividends; |
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Obligations to pay fees, taxes and similar charges; or |
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Restrictions imposed because of laws or regulations applicable to ADSs or the withdrawal of securities on deposit. |
The Deposit Agreement may not be modified to impair an ADS holders right to withdraw the securities represented by the holders ADSs except to comply with mandatory provisions of law.
Voting rights
Holders of ADSs generally have the right under the Deposit Agreement to instruct the Depositary to exercise the voting rights for the Shares represented by the holders ADSs. The voting rights of holders of Shares are described in Description of Common Shares.
At Sony Corporations request, and as soon as practicable after receipt thereof, the Depositary will distribute to ADS holders any notice of shareholders meeting received from Sony Corporation together with information explaining how to instruct the Depositary to exercise the voting rights of the securities represented by ADSs. In lieu of distributing such materials, the Depositary may, with the Companys prior written consent and to the extent not prohibited by laws or regulations, or by the New York Stock Exchange, distribute to holders of ADSs instructions on how to retrieve such materials upon request.
If the Depositary timely receives voting instructions from a holder of ADSs, it will endeavor to vote the securities (in person or by proxy) represented by the holders ADSs in accordance with such voting instructions. The Depositary will not exercise any voting discretion over the securities on deposit.
If the Depositary does not receive timely voting instructions from an ADS holder, such holder will be deemed to have instructed the Depositary to give a discretionary proxy to a person designated by Sony Corporation to vote the securities on deposit, except with respect to any matter to be voted on as to which Sony Corporation informs the Depositary that (i) there is contest to the action to be taken at the meeting, (ii) the matter relates to authorizing a merger, consolidation or amalgamation (except an amalgamation with one or more of Sony Corporations 100%-owned Japanese subsidiaries), or (iii) the rights or privileges of the holders of such Shares or other securities on deposit may be substantially affected. Notwithstanding the foregoing, the Depositary will, if Sony Corporation so requests in writing, represent all securities on deposit (whether or not voting instructions have been received from holders thereof) for the sole purpose of establishing quorum at a meeting of shareholders.
The ability of the Depositary to carry out voting instructions may be limited by practical and legal limitations and the terms of the securities on deposit. Sony Corporation cannot assure ADS holders that they will receive voting materials in time to enable them to return voting instructions to the Depositary in a timely manner.
Fees and charges
See Item 12D. Description of Securities other than Equity SecuritiesAmerican Depositary Shares in Sony Corporations annual report on Form 20-F for the fiscal year ended March 31, 2020.
Amendment and termination
Sony Corporation may agree with the Depositary to modify the Deposit Agreement at any time without ADS holders consent. Sony Corporation undertakes to give holders 30 days prior notice of any modifications that would materially prejudice any of their substantial rights under the Deposit Agreement. Sony Corporation will not consider to be materially prejudicial to ADS holders substantial rights any modifications or supplements that are reasonably necessary for the ADSs to be registered under the Securities Act or to be eligible for book-entry settlement, in each case without imposing or increasing the fees and charges that ADS holders are required to pay. In addition, Sony Corporation may not be able to provide ADS holders with prior notice of any modifications or supplements that are required to accommodate compliance with applicable provisions of law.
An ADS holder who continues to hold ADSs after the modifications to the Deposit Agreement become effective will be bound by the modifications to the Deposit Agreement. The Deposit Agreement cannot be amended to prevent a holder of ADSs from withdrawing the Shares represented by the holders ADSs (except as permitted by law).
Sony Corporation has the right to direct the Depositary to terminate the Deposit Agreement. Similarly, the Depositary may in certain circumstances on its own initiative terminate the Deposit Agreement. In either case, the Depositary must give notice to ADS holders at least 30 days before termination. Until termination, ADS holders rights under the Deposit Agreement will be unaffected.
After termination, the Depositary will continue to collect distributions received (but will not distribute any such property until ADS holders request the cancellation of their ADSs) and may sell the securities held on deposit. After the sale, the Depositary will hold the proceeds from such sale and any other funds then held for the holders of ADSs in a non-interest bearing account. At that point, the Depositary will have no further obligations to ADS holders other than to account for the funds then held for the holders still outstanding (after deduction of applicable fees, taxes and expenses) and as may be required at law in connection with the termination of the Deposit Agreement.
Books of Depositary
The Depositary maintains ADS holder records at its depositary office. A holder of ADSs may inspect such records at such office during regular business hours but solely for the purpose of communicating with other holders in the interest of business matters relating to the ADSs and the Deposit Agreement.
The Depositary maintains in New York facilities to record and process the issuance, cancellation, combination, split-up and transfer of ADSs. These facilities may be closed from time to time, to the extent not prohibited by law.
Limitations on obligations and liabilities
The Deposit Agreement limits Sony Corporations obligations and the Depositarys obligations to holders of ADSs. Please note the following:
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Sony Corporation and the Depositary, and their respective directors, officers, employees, agents and affiliates, are obligated only to take the actions specifically stated in the Deposit Agreement without negligence or bad faith. |
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Sony Corporation and the Depositary, and their respective controlling persons, directors, officers, employees agents, and affiliates, disclaim any liability for any failure of the Depositary to carry out voting instructions, for any manner in which a vote is cast or for the effect of any vote, provided it acts in good faith and in accordance with the terms of the Deposit Agreement. |
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Sony Corporation and the Depositary disclaim any liability for any failure to determine the lawfulness or practicality of any action, for the investment risks associated with investing in Shares or other deposited property, for the validity or worth of the Shares or other deposited property, for any tax consequences that result from the ownership of ADSs, Shares or other deposited property, for the credit-worthiness of any third party, for allowing any rights to lapse under the terms of the Deposit Agreement, for the timeliness of any of Sony Corporations notices or for Sony Corporations failure to give notice, or for any action of or failure to act by, or any information provided or not provided by, DTC or any DTC Participant. |
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The Depositary disclaims any liability for the content of any document forwarded to holders of ADSs on Sony Corporations behalf or for the accuracy of any translation of such a document. |
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Sony Corporation and the Depositary will not be obligated to perform any act that is inconsistent with the terms of the Deposit Agreement. |
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Sony Corporation and the Depositary disclaim any liability if Sony Corporation or the Depositary are prevented or forbidden from or subject to any civil or criminal penalty or restraint on account of, or delayed in, doing or performing any act or thing required by the terms of the Deposit Agreement, by reason of any provision, present or future of any law or regulation, or by reason of present or future provision of Sony Corporations Articles of Incorporation, or any provision of or governing the securities on deposit, or by reason of any act of God or war or other circumstances beyond Sony Corporations control. |
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Sony Corporation and the Depositary disclaim any liability by reason of any exercise of, or failure to exercise, any discretion provided for in the Deposit Agreement or in Sony Corporations Articles of Incorporation or in any provisions of or governing the securities on deposit. |
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Sony Corporation and the Depositary further disclaim any liability for any action or inaction in reliance on the advice or information received from legal counsel, accountants, any person presenting Shares for deposit, any holder of ADSs or authorized representatives thereof, or any other person believed by either of Sony Corporation or the Depositary in good faith to be competent to give such advice or information. |
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Sony Corporation and the Depositary also disclaim liability for the inability by a holder to benefit from any distribution, offering, right or other benefit that is made available to holders of Shares but is not, under the terms of the Deposit Agreement, made available to holders of ADSs. |
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Sony Corporation and the Depositary also disclaim liability for any consequential or punitive damages (including lost profits) for any breach of the terms of the Deposit Agreement. |
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Sony Corporation and the Depositary, and their controlling persons and agents, may rely without any liability upon any written notice, request or other document reasonably believed to be genuine and to have been signed or presented by the proper parties. |
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No disclaimer of liability under the Securities Act is intended by any provision of the Deposit Agreement. |
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Nothing in the Deposit Agreement gives rise to a partnership or joint venture, or establishes a fiduciary relationship, among Sony Corporation, the Depositary and ADS holders. |
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Nothing in the Deposit Agreement precludes the Depositary (or its affiliates) from engaging in transactions in which parties adverse to Sony Corporation or the ADS owners have interests, and nothing in the Deposit Agreement obligates the Depositary to disclose those transactions, or any information obtained in the course of those transactions, to Sony Corporation or to the ADS owners, or to account for any payment received as part of those transactions. |
Taxes
Holders of ADSs will be responsible for the taxes and other governmental charges payable on the ADSs and the securities represented by the ADSs, and Sony Corporation will have no liability therefor. Sony Corporation, the Depositary and the Custodian may deduct from any distribution the taxes and governmental charges payable by holders and may sell any and all property on deposit to pay the taxes and governmental charges payable by holders. ADS holders will be liable for any deficiency if the sale proceeds do not cover the taxes that are due.
The Depositary may refuse to issue ADSs, to deliver, transfer, split and combine ADRs or to release securities on deposit until all taxes and charges are paid by the applicable holder. The Depositary and the Custodian may take reasonable administrative actions to obtain tax refunds and reduced tax withholding for any distributions on an ADS holders behalf. However, an ADS holder may be required to provide to the Depositary and to the Custodian proof of taxpayer status and residence and such other information as the Depositary and the Custodian may require to fulfill legal obligations. An ADS holder is required to indemnify Sony Corporation, the Depositary and the Custodian for any claims with respect to taxes based on any tax benefit obtained for the holder.
Foreign currency conversion
As soon as reasonably practicable, the Depositary will arrange for the conversion of all foreign currency received into U.S. dollars if in the reasonable judgment of the Depositary such conversion is practicable, and it
will distribute the U.S. dollars in accordance with the terms of the Deposit Agreement. An ADS holder may have to pay any applicable fees, any reasonable and customary expenses incurred in converting foreign currency, and any expenses incurred in complying with currency exchange controls and other governmental requirements.
If the conversion of foreign currency is not practicable or lawful, or if any required approvals are denied or not obtainable at a reasonable cost or within a reasonable period, the Depositary may take the following actions in its reasonable discretion:
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Convert the foreign currency to the extent practicable and lawful and distribute the U.S. dollars to the holders for whom the conversion and distribution is lawful and practicable; |
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Distribute the foreign currency to holders for whom the distribution is lawful and practicable; or |
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Hold the foreign currency (without liability for interest) for the applicable holders. |
Governing law
The Deposit Agreement and the ADRs will be interpreted in accordance with the laws of the State of New York. The rights of holders of Shares (including Shares represented by ADSs) are governed by the laws of Japan.
Ownership restrictions
Sony Corporation may restrict, in such manner as it deems appropriate, transfers of ADSs where such transfer might result in the total number of Shares represented by ADSs owned by a single ADS holder exceeding any limits imposed by applicable law or Sony Corporations Articles of Incorporation. Sony Corporation may also, in its sole discretion but subject to applicable law, instruct the Depositary to take certain actions with respect to the ownership interest of any ADS holder in excess of these limits.
The Financial Instruments and Exchange Act of Japan, and other applicable Japanese law, require any ADS holder who becomes, or ceases to be, directly or indirectly, the beneficial owner of more than 5% of all outstanding Shares (whether such interest is held in whole or only in part through ADRs) to, within five business days following such event, send written notice to the Depositary at its Transfer Office and to Sony Corporation at its principal office in Japan currently at 7-1, Konan 1-chome, Minato-ku, Tokyo 108-0075, Japan, Attention: Investor Relations Department. For more details on the information that must be included in the notice, please refer to the Deposit Agreement. A similar notice must also be filed in respect of any subsequent change of 1% or more in any such holding, or any change in material matters set out in notices previously filed. In addition, the Foreign Exchange and Foreign Trade Act of Japan and its related cabinet orders and ministerial ordinances govern certain aspects relating to the holding of ADSs and the exercise of voting rights by an ADS holder who falls into the definition of foreign investor that constitute an inward direct investment, as described in more detail in Item 10D. Exchange Controls of Sony Corporations annual report on Form 20-F for the fiscal year ended March 31, 2020.
An ADS holder shall, if so requested in writing by Sony Corporation, provide such information with respect to the beneficial ownership of Shares as is requested.
If Sony Corporation notifies the Depositary in writing that a particular ADS holder has not complied with the requirements above, at Sony Corporations written request the Depositary will instruct the ADS holder to surrender its ADSs for cancellation so as to permit Sony Corporation to deal directly with the ADS holder as a shareholder of Sony Corporation.
Exhibit 12.1
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Kenichiro Yoshida, Chairman, President and Chief Executive Officer, certify that:
1. I have reviewed this annual report on Form 20-F of Sony Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4. The companys other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the companys internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the companys internal control over financial reporting; and
5. The companys other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the companys auditors and the audit committee of the companys board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the companys ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the companys internal control over financial reporting.
/s/ KENICHIRO YOSHIDA | ||||||
Date: June 26, 2020 |
Kenichiro Yoshida Chairman, President and Chief Executive Officer |
Exhibit 12.2
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Hiroki Totoki, Executive Deputy President and Chief Financial Officer, certify that:
1. I have reviewed this annual report on Form 20-F of Sony Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4. The companys other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the companys internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the companys internal control over financial reporting; and
5. The companys other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the companys auditors and the audit committee of the companys board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the companys ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the companys internal control over financial reporting.
/s/ HIROKI TOTOKI | ||||||
Date: June 26, 2020 |
Hiroki Totoki Executive Deputy President and Chief Financial Officer |
Exhibit 13.1
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), each of the undersigned officers of Sony Corporation (the Company), does hereby certify, to such officers knowledge, that:
The Annual Report on Form 20-F for the fiscal year ended March 31, 2020 (the Form 20-F) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 20-F fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ KENICHIRO YOSHIDA |
Kenichiro Yoshida |
Chairman, President and Chief Executive Officer |
/s/ HIROKI TOTOKI |
Hiroki Totoki |
Executive Deputy President and Chief Financial Officer |
Date: June 26, 2020
Exhibit 15.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-170714, 333-178115, 333-185261, 333-192436, 333-200414, 333-208113, 333-214758, 333-219266, 333-221693, 333-223219, 333-226338, 333-228421, 333-232729, 333-234753 and 333-237683) of Sony Corporation of our report dated June 26, 2020 relating to the financial statements and financial statement schedule and the effectiveness of internal control over financial reporting, which appears in this Form 20-F.
/s/ PricewaterhouseCoopers Aarata LLC
Tokyo, Japan
June 26, 2020